Author Alan Tu
Updated July 25, 2023

Utilization rate is an indicator of manufacturers' overall performance, the supply-demand dynamics of their products, and the healthiness of the entire industry.

In recent years, drawn by handsome profits in upstream sectors, manufacturers expanded polysilicon and wafer production capacities meaningfully, resulting in inventory pileups, thus triggering price declines in the upstream.

20230720_InfoLink_PV industry utilization rate analysis_en

Source: Supply Chain Utilization Rate Report, InfoLink Consulting

The following paragraphs analyze the current capacity and utilization rates of each sector.


In July, polysilicon capacity keeps increasing, with an overall utilization rate at 90%. Estimated monthly production volume reaches 122,000-128,000 MT. Manufacturers maintain utilization rates, depleting inventory after prices plunged. Production output is little changed from a month prior, thanks to ongoing new capacity releases of manufacturers, albeit at varying paces as some suspend projects or are affected by power rationing. Still, in response to the demand for n-type products, manufacturers dedicate more capacity to produce high-quality polysilicon, of which the output per unit time is less than that of polysilicon for p-type production, affecting actual output. Manufacturers will focus on increasing production volume and improving product quality over the coming few years.


Estimated monthly production volume in July reaches 52-53 GW, an 11-13% month-on-month increase. Due to increasing capacity, utilization rates sit around 83%. In addition to furnaces vertical integrators bring online for in-house use, professional wafer manufacturers release new capacities. Therefore, more wafers are available on the market than a month earlier.

For now, n-type wafer remains a make-to-order item, with Tier-1 module makers accounting for most purchases. Excess supply and unhealthy inventory levels are not likely in the short term. Whether n-type wafers will see a shortage afterward hinges on the output of n-type cells and modules.


Chinese PERC cell manufacturers have been operating at full capacity in recent months. Capacity expansions focus on TOPCon cell production but come online leisurely. This month, Chinese cell manufacturers keep an overall utilization rate of 70%, with output rising marginally to 48 GW, and monthly n-type cell output to 10-12 GW.

Home to most non-China cell capacity, Southeast Asia saw utilization rates plummet by 5-15% due to power supply issues in Vietnam. As the issue resolves this month, the overall utilization rate of Southeast Asia will recover to 70%.


Last month, faced with inventory write-down after marked price declines across the supply chain, module makers turned cautious towards production plans, with end users in all markets in a wait-and-see mode. Receiving new orders this month, module makers intend to raise production plans. Utilization rates of Tier-1 module makers rebound to around 82%, and that of their Tier-2 and non-China peers advance to 65%. Bringing new capacities come online, Tier-1 module makers boost output to 46 GW, a 15% year-on-year increase.

Some module makers have sold off to keep inventory in check, whereas some still hold large quantities of excess stock on hand. Overall inventory level equals one and a half to two months of production.

In the first half of this year, manufacturers expanded polysilicon and wafer productions, increasing monthly output, leading to inventory accumulation and price tumble. In the cell sector, manufacturers operated at full capacity for PERC cells, while n-type cell capacity came online, underpinning a steady growth of monthly output. In the module sector, production plans are subject to change in accordance with end-user demand in and out of China.

In the second half of this year, upstream prices see much less room for further declines after nearing the break-even point. However, manufacturers plan substantial expansions, extending risks of oversupply and higher inventory levels. They will control output by adjusting utilization rates to strike a balance between inventory management and profits.

As cell manufacturing technology iterates, the nominal TOPCon cell capacity will exceed 600 GW by the end of this year. Given that and the existing 500-GW PERC cell capacity, supply surplus will intensify competition in the cell sector. Provided TOPCon cell capacities come online as arranged, and output rises more than expected, n-type wafers will run short, and cell manufacturers will adjust utilization rates to sustain less price decrease amid an oversupply. Meantime, the module glut resulting from the participation of new players and manufacturers from upstream sectors leads to fierce price wars and inventory accumulation worldwide. With advantages in brand and vertical integration, Tier-1 module makers will control utilization rates very differently from their Tier-2 and Tier-3 peers in the second half of this year.

InfoLink launches an updated version of its Supply Chain Utilization Rate Report. Unlocking historical data since 2022, this updated version showcases interactive visuals for swift insights on sector capacity utilization. Contact us for more details.

InfoLink launches an updated version of its Supply Chain Utilization Rate Report.

The updated report features interactive charts for comparing the latest utilization rates, enabling a faster and clearer understanding of capacity utilization status of the solar industry.

Learn more
InfoLink launches an updated version of its Supply Chain Utilization Rate Report.

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