ASIAN SUNMAKERS THRIVING

PV News Annual Data Collection Results: 2010 Cell, Module Production Explodes Past 20 GW; Technology trends, competitive dynamics, top producers, and the outlook for 2011.
Shyam Mehta, may 9, 2011 (Greentech Media)

"After a relatively sober 2009 where installations grew by ‘only’ 24% (admittedly in the midst of a global recession), the global PV market roared back to life in 2010, where the 17.5 GW of installations exceeded the previous years’ 7.2 GW by a staggering 141%. In large part, this can be traced to three factors – (i) the continued strength of European feed-in tariff markets - most notably Germany (7.3 GW), Italy (3.9 GW), and the Czech Republic (1.2 GW), (ii) component prices drops that until now, have kept pace with subsidy cuts (tier 1 Chinese crystalline silicon module prices declined from around $2.20/Wp on average in 2009 to $1.75/Wp in 2010), and (iii) the availability of sufficient supply of polysilicon, wafers, cells, and modules due to the rapid expansion of manufacturing capacity, especially in the low-cost regions of China and Taiwan…

"The increasing price-sensitivity of PV markets in 2009 and 2010 and the continuing commoditization of c-Si technology have played to the strengths of producers in low-cost regions such as China and Taiwan, allowing them to expand production rapidly and consolidate market share substantially over this time. Total cell production from the China/Taiwan region increased from 5,630 MW in 2009 to 14,193 MW in 2010, representing a year-over-year increase of 152%, and a market share of 59%, up from 50% in the previous year. Central to this has been the availability of vast reserves of low-cost capital from Chinese state banks, which have allowed players from this region to scale up capacity and lower manufacturing costs to levels well below their peers. Fears over the quality of Asian modules vis-à-vis Western and Japanese products have been all but banished; in fact, a growing number of American, European, and Japanese firms now employ Chinese module producers in an OEM or tolling capacity and sell these modules under their own high-profile brand names, often without making this information public."

(from Greentech Media Research - click to enlarge)

"In close conjunction with the rise of China and Taiwan as manufacturing centers has been the decline of Europe and Japan as production centers for PV components. Although production growth from these two regions was still more than healthy in 2010 (49% and 45% respectively), this lagged overall market growth considerably. Few producers expanded the capacity of their European facilities by any notable degree in 2010, choosing either to utilize existing capacity or relying on contract manufacturing or offshore production to serve their demand; from comprising 54% of global cell production in 2007, Europe and Japan made up only 22% of the 2010 total. Production growth was more robust growth in North America and the rest of the world (RoW) region, coming in at 93% and 118% respectively…

"As one would expect, the list of top PV cell producers is dominated by names from China and Taiwan: nine of the top fifteen cell producers are based in this region. After coming in at number two in 2009, Suntech Power takes the honors in terms of largest production output for both cells and modules in 2010. China-based JA Solar comes in at second place for cells, followed by First Solar, Yingli Green Energy, and Trina Solar: all but First Solar are China-based, and have a high degree of vertical integration..."

(from Greentech Media Research - click to enlarge)

"...The rest of the list is made up of the next tier of Chinese producers (Hanwha SolarOne, Canadian Solar, Neo Solar), Taiwanese pure-play cell producers (Motech, Gintech), and vertically integrated Western/Japanese firms (REC, SunPower, Kyocera, Sharp). As in previous years, First Solar and Sharp’s tandem-junction facility are the only thin film representatives on the list. In total, the top fifteen cell firms produced 13,151 MW of cells, 55% of the 2010 total. Six producers (seven, if CIGS producer Solibro is counted towards Q-Cells’ output) produced over 1 GW in 2010, compared to only one in 2009, indicating that PV manufacturing is as much a business of industrial-scale manufacturing as technology innovation…


"… 2011 and 2012 are widely expected to be much more challenging years, with policymakers attempting to reign in demand by imposing significant cuts in all key feed-in tariff-driven markets…At the same time, cell and module manufacturers have been expanding relentlessly; cell and module capacity are set to increase by another 54-57% in 2011; Chinese and Taiwanese manufacturers alone are adding 14 GW in cell capacity this year. This points to the very real possibility of an oversupplied market in the second half of 2011 and 2012, with capacity utilization suffering and consequent component price drops through the value chain…However, the PV industry has proven to be surprisingly dynamic and resilient in the face of such prophecies in the past; overall, consolidation has certainly not occurred at the pace that many pundits previously predicted, as companies have made rapid adjustments in their capacity planning, technology investment, and business models to deal with existing market dynamics. Given this, it would be wise to stay away from any doom-and-gloom prophecies despite the many challenges ahead."