NewEnergyNews: Effects of the PV Supply-Demand Equation Balancing Out; While PV makers sell off inventories, nobody is wearing out factory equipment or buying new.

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    Wednesday, November 14, 2012

    Effects of the PV Supply-Demand Equation Balancing Out; While PV makers sell off inventories, nobody is wearing out factory equipment or buying new.

    Effects of the PV Supply-Demand Equation Balancing Out; While PV makers sell off inventories, nobody is wearing out factory equipment or buying new.

    Herman K. Trabish, June 28, 2012 (Greentech Media)

    As PV module, cell and polysilicon prices fell through the basement last year, global demand rose and the world's manufacturers scrambled to make more cells and modules. Eventually, the market was glutted, resulting in what GTM Research’s Shyam Mehta described as an “overcrowded and cutthroat PV landscape.”

    Recent global industry readings have suggested supply and demand are likely to start balancing out by the end of this year or early next year.

    Meanwhile, world manufacturers are clearly under-using their factory equipment. Global makers of the equipment that makes PV are not selling and makers of PV are not ordering.

    According to the newest SEMI/German Engineering Federation (VDMA) numbers, manufacturing equipment billings worldwide have fallen the last three third quarters in a row. They fell 20 percent in Q1 2012 and they are down 60 percent from Q1 2011.

    Global Q1 2012 billings of $695 million were the lowest level since scorekeeping began in Q1 2010.

    Q1 2012 bookings ticked up 29 percent to $591 million, but only because one equipment maker took a large one-time order. Absent this trend breaker, the drop in growth worldwide would have been 36 percent.

    The numbers, collected by SEMI and VDMA from 50 global equipment companies quarterly, promise a full-year revenue contraction in 2012 for the global equipment manufacturing sector.

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