SUN’S CONSOLIDATION

PV Supply Stabilization Reduces Pressure on ASP Declines in 2013; Anti-Dumping Fears and Further Corporate Casualties to Eliminate Competition for Market Survivors

September 24, 2012 (SolarBuzz)

“Photovoltaic (PV) module manufacturers that survive through 2013 are set for strong market-share gains, as global trade barriers and increased corporate casualties combine to decrease the competitive landscape significantly…During Q3’12, leading PV module manufacturers were confronted by increasing inventory levels (from 66 to 79 days outstanding) and declining shipments (down 7% Q/Q)…[because of expectations for] a traditional PV second-half boom in shipments…[but Q3 2012 demand] has yet to support the higher production levels.

“1H’12 global demand was approximately 13 GW, while 2H’12 demand is projected to reach 16 GW, for only 25% growth…Q4’12 will provide a significant boost in end-market demand…[but not that of Q4 2011 when year-end demand resulted in over 10 GW of PV modules being consumed…Demand in Q4’12 is now expected to be in the range of 8.5-9.5 GW…[with demand] for 2012 to fall just short of 30 GW. An upside of 25% remains possible, but is strongly dependent on a late surge in shipments to China and India…[and] recovery across Europe…”

click to enlarge

“Signs are now emerging that 2013 will provide an opening for leading PV manufacturers to accomplish market-share gains…[L]eading module suppliers [will be] able to increase production at the expense of legacy competitors…This stabilization phase during 2013 will be characterized by increasing consolidation and liquidation of lower-tier PV manufacturers, many of whom have suspended production or are simply unburdening inventory…

“As supply and demand continue to stabilize, this will result in a slower…decline and a lower risk of inventory build during 2013. This will allow upstream module manufacturers to maintain higher inventory levels as there will be less risk of any dramatic devaluation of stock-on-hand due to rapid end-market fluctuations…[Instead of] European and US-based PV manufacturers, the next set of exits from the PV industry will likely come from underperforming Chinese tier 2 and 3 manufacturers…”

Tweet