HOW TO SOLVE THE CHINA/TAIWAN SUN OVERSUPPLY

PV Technology Roadmap and Buying Cycle Essential to Rendering Legacy Capacity as Obsolete; Focus on technical innovation from 2013 will create new revenue opportunities for PV capital equipment supply chain

July 16, 2012 (SolarBuzz)

“A technology roadmap for the PV industry is set to emerge during 2013, bringing the PV industry into alignment with adjacent technology sectors…[It will lead a] new technology buying cycle, which will be driven collectively by top-tier c-Si manufacturers in China and Taiwan…[The until now] lack of synergy has been a factor preventing cell efficiencies from reaching the 20% level. During 2011, only 15% of cells produced by tier 1 manufacturers were rated at 18% or higher…[Through] a new PV technology roadmap, 75% of tier 1 c-Si capacity will fall into this high-efficiency category by the end of 2015…

“…[A current manufacturing shakeout] is likely to reduce the number of cell and thin-film manufacturers from almost 400 in 2011 to less than 100 by 2016, with the top 20 manufacturers contributing over 60% of cells produced for module shipments. Within the thin-film segment, only 13 manufacturers are projected to have production output exceeding 100 MW by 2016…The shakeout along the value-chain will be accompanied by a re-ordering of preferred tool providers…New order intake across the entire PV equipment supply-chain remains at a 5-year low, as the industry continues to digest the full effects of strong capacity over-investment in 2010 and 2011. This weak environment is forecast to continue during 2012 and 1H’13…”

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“Leading tier 1 c-Si manufacturers are motivated to implement new technologies in order to increase average cell efficiencies above the levels that can be achieved from idled and mothballed capacity of tier 2 and 3 competitors. This will effectively consign a considerable quantity of uncompetitive capacity as obsolete and remove its impact on the PV industry supply/demand balance…[T]o prevent a secondary equipment market from emerging, PV equipment suppliers need to act quickly to cannibalize the multi-GW of un-installed tools purchased during the over-spending in 2010 and 2011. The new PV technology roadmap will greatly assist equipment suppliers in achieving this goal in 2013.

“With new equipment suppliers expected to enter the PV supply chain, the competition for specific tool segments will increase. Until now, c-Si cell deposition tools have commanded the highest ASPs and offered the greatest served addressable market for c-Si PV equipment suppliers…[T]he market for c-Si PECVD tools reached $880 million in 2011. However, with PV thin-film deposition equipment an unattractive segment to target in the near term, a greater number of tool suppliers are likely to contest c-Si deposition equipment revenues from 2014 onwards…”

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