|July 25, 2022
InfoLink Consulting was invited by the China Photovoltaic Industry Association (CPIA) to the PV Industrial Chain Supply Conference 2022 on July 20. On behalf of InfoLink, senior analyst Dora Zhao shed light on supply, demand, and price forecast of the PV industry.
Countries around the globe introduce policy frameworks for renewable energy, fueling up demand for renewables, especially PV energy. “Given greater-than-expected end user demand in larger markets, such as Europe, China, and Brazil, and actual supply chain situation in the first half of the year, there will be 239-270 GW of module demand this year, a 25-34% YoY increase on the 178 GW installed capacity last year,” said Zhao.
Production expansions continue, extending disproportional upstream supply-demand relationship
Production capacity and supply-demand relationship of the PV supply chain are closely heeded in the industry. Since the beginning of 2022, production capacities of polysilicon, wafer, cell, and module sectors have been expanding. However, an imbalanced supply-demand relationship persists this year.
The polysilicon sector receives the most attentions and pressures from downstream buyers. Polysilicon production concentration in the top 5 manufacturers increases again, potentially from the current 71% to 76%, Zhao said. Meanwhile, as high profitability of the polysilicon sector lures in businesses in recent years, new production capacities are expected to materialize.
Existing polysilicon capacities overseas are fully booked, thanks to demand from certain end users. The market share holds steady for the time being, but manufacturers are likely to expand polysilicon overseas in the future.
Concentration of the wafer sector declines faster, as more and more new players join in over the past two years. The nip and tuck market share competition between two major manufacturers has changed in the past few years, Zhao said. Production capacity is a fundamental, yet partial factor for businesses to stand firm in the industry. Quality control and performance of the product is the ultimate battlefield where the winner stands out, for it is competitiveness based on technological achievement that endures.
Cell production capacity continues to grow, but at varying paces for different technologies. Zhao projects TOPCon cell production capacity to exceed 60 GW by the end of 2022. Whereas HJT’s actual production capacity is low, despite receiving much attention in the industry. By the end of 2022, HJT production capacity may reach 15 GW, among which 3 GW are R&D and pilot lines, according to statistics compiled by InfoLink. Conversion rate of high-efficiency cells is to be heeded.
The module sector still struggles between high shipments target and profits. Vertically integrated companies see revenues narrowly cover production costs, while mid and small-scale module makers can take the costs no more. In the third quarter, lofty production costs underline the advantage vertical integrated companies enjoy in terms of production costs and overseas channels. In the second half, vertically integrated companies will continue encroaching market shares of mid and small-scale module makers. Prices will diverge as vertical integrated companies attempt to secure market shares.
At the end of the speech, Zhao reviewed and projected supply chain price trend and supply-demand relationship of every sector. The joint development of various sectors is very challenging. The PV industry grows rapidly, and imbalanced supply-demand relationship is a common occurrence. Having weathered a long-lasting mono-Si wafer shortage and limited production capacity, the industry may experience other constraints in the future. Gradually maturing after all the difficulties, the PV industry are likely to face excess production capacity across sectors.
Senior solar analyst
Dora has 14+ years of experience in the PV industry. Prior to joining InfoLink Consulting, she worked across sales and market analysis departments in leading PV company.
Dora now serves as a senior analyst at PV InfoLink, division of InfoLink Consulting. She mainly conducts research on the upstream segment of the supply chain, providing analysis of supply and demand, price trends and competitions in the industry.