Apollo Solar – Hanergy’s PV equipment tool maker subsidiary – has become the clear leader for solar PV equipment revenues during 2013, according to new findings in the latest NPD Solarbuzz PV Equipment Quarterly report. Previous leading rank companies of the PV equipment supply sector include Centrotherm, Applied Materials and Meyer Burger.
There is no getting around it: 2013 was quite simply a shocking year for PV equipment suppliers, with annual revenues (from c-Si ingot-to-module and thin-film) for the sector falling to US$1.73 billion. The addition of solar-specific polysilicon equipment revenues (mainly CVD reactors) provided minimal upside also with polysilicon expansions also largely put on hold, taking the overall poly and PV spending just over the US$2 billion mark.
Indeed, many PV equipment suppliers went through the whole of 2013 with practically no new orders, and worse still, many were still left to de-book legacy orders that even the most optimistic of CFOs found hard to justify staying on the books.
The reasons for the sector decline are well documented. Global over-capacity in 2011 and 2012 saw the PV equipment supplier total available market (TAM) reach the US$13 billion level in 2011, followed by manufacturing profits being eradicated and then a draconian brake being applied to PV capex.
With the PV industry continuing to ignore external pleas to adopt a semi-like roadmap – and technology-buy cycles being confined to academic papers – the PV equipment supply-chain was largely hung out to dry in 2013.
As such, the overall PV equipment TAM was so low in 2013 that there is limited relevance to pulling out a ranking list this time around. In fact, a large chunk of the 2013 spending was still based upon legacy tool shipments. As such, the ranking was more a means of benchmarking the success of accounts receivable departments, than a specific measure of tool shipments driven by capacity expansions.
As a consequence, it is perhaps somewhat fitting that, during 2013, the leading PV equipment supplier (ranked purely on a revenue-received basis) was a turn-key a-Si equipment supplier (Apollo Solar) that delivered most of this equipment before 2013, and whose end customer is now its corporate parent (Hanergy).
Even more humbling is the fact that the effectiveness of the gigawatt of a-Si capacity – that underpinned Apollo’s chart-topping success of 2013 – has barely made a ripple on the end market PV module supply continuum.
Only two other PV equipment suppliers exceeded solar-specific (i.e. excluding all non-solar equipment revenues) revenues above US$200 million in 2013: GT Advanced Technologies and Meyer Burger. Other PV equipment suppliers that had been doing in excess of US$1 billion of PV revenues back in 2011 saw their PV revenues decline an order of magnitude within two years. Many mothballed solar activities and diverted staffing and resource to any other adjacent segment on offer.
However, as discussed in detail within the latest NPD Solarbuzz PV Equipment Quarterly report, all this is set to change from 2015 onwards. In fact, upward revisions to NPD Solarbuzz forecasts for end-market demand (starting with the 49GW forecast for 2014) suggest a new wave of PV capex, characterised by gigawatt-scale fab expansions by the market leaders, will be unleashed from 2015.
As a consequence, the first half of 2014 represents a strong call-to-arms for PV equipment suppliers that wish to be part of the next wave of strong PV capital spending. This will include navigating through the complex web of capacity rationalization and OEM deals that have acted to delay capex releases during most of last year, and which will continue to have a strong impact over the next few quarters.
It is now also a time for equipment suppliers to address the real prospects for many of the so-called next-generation processes that have taken centre-stage over the past 12 months. Companies pursuing R&D efforts and having a range of high-efficiency projects is nothing new to the PV industry. But in 2013 – in the absence of repeat business for mass-production tooling – any orders for R&D technologies clearly took on elevated importance. Whether this is justified or not going forward will certainly become clear by the end of 2014.
However, returning to the rankings issue, there is still every possibility that Hanergy/Apollo’s PV chart-topping reign could be here to stay for a while.
If Hanergy decides to divert just a fraction of its multi-gigawatt thin-film aspirations (lots of CIGS and even more a-Si) once again to Apollo, then 2014 and 2015 could again see more PV-specific tool capex being recognised by Apollo than any other capital equipment supplier serving the PV sector.
If this occurs, then it could be Apollo’s own supply chain of outsourced tool makers that have the most to gain, albeit at the risk of large one-off orders that may never be repeated again.