Lack of Yingli Green’s CapEx reveals scale of asset-lite fab operations

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Earlier today – 30 August 2013 – the world’s largest global solar PV module supplier, Yingli Green Energy, reported its second quarter earnings results and guided on expectations for the 2H’13 and 2014.

The data mostly confirmed Yingli Green’s clear status as the number one module supplier in the PV industry today. Just to get this into perspective, here are some stats from the latest NPD Solarbuzz Module Tracker Quarter report, based on Yingli’s new updates:

• Yingli has shipped the most PV panels per quarter, every quarter, for the past six quarters going back to Q1’12.

• During each of the past 3 quarters (Q4’12, Q1’13 and Q2’13), Yingli has set a world record for quarterly shipments for a PV module supplier.

• Yingli has shipped almost 1GW more than any other PV module supplier in the trailing twelve months to end Q2’13.

• Yingli’s market share has reached 10% and is trending upwards

Records aside however, embedded in the results were some alarm bells. Not for Yingli but for companies that had been hoping to hear the words ‘new CapEx’, ‘capacity expansion’, ‘new process flows’, ‘high efficiency upgrading’, etc…

The news on CapEx is really bad if you have Yingli as a key customer. During the entire 6-month period of 2H’13, CapEx (for a company with >2GW vertical integration) is only US$40 million. That’s as close as you can get to maintenance-only.

But the more troubling news for PV equipment suppliers is that Yingli has now stated it can ship 4GW of modules in 2014 without having to add any new capacity.


Well, first off, this fully contradicts some of the strange press releases and new stories in the past two weeks that claimed new PV capacity additions from the leading makers were imminent, and we should be expecting to see all the leading players adding lots of capacity in 2014.

And – it also squashes the odd claims that an equipment spending rebound is only a few months away and might get driven out of the Middle East or Latin America?

Neither of the above claims had any strong basis or analysis to support, but each got picked up on – maybe this is because people are still desperate for any positive news on new-capacity and new equipment spending.

The true explanation is that the PV industry is dominated by Chinese module suppliers today – more so than in the past. Chinese c-Si manufacturers have consistently operated in a part-fabless or asset-lite manner. Lately, leading Japanese module suppliers have adopted this approach also. During 2012 and 2013, the leading Chinese module suppliers have been able to increase the levels to which in-house and third-party capacity is adjusted to prevent inventory levels building up.

With more module share coming from China now, and as many Western competitors leave the industry or lose further market-share, the use of asset-lite operations is having a more profound impact on any company waiting for new capacity to be added.

Other factors allowing Yingli to guide 4GW shipments with no-CapEx include:

• There is a 12GW virtual fab in China from tier 2 and tier 3 manufacturers with me-too capacity and limited access to overseas markets.

• The US demands non-China cells in modules.

• The leading suppliers are still posting negative operating margins. Saving costs everywhere is essential. CapEx can be avoided by using third-party capacity.

• Market-share gains (with overseas sales/marketing cost) outweighs adding new capacity.

• There is multi-GW idled capacity at Suntech, LDK and elsewhere in China that could still be acquired at very low cost.

This all points to the equipment spending downturn lasting well into 2014, and perhaps the next meaningful new capacity is not going to arrive until 2015. Unless – of course – technology can rescue the industry and force every module supplier to perform significant line upgrades/process-flow changes in order to remain competitive. But without any technology roadmap being followed, this is highly unlikely to happen within the next 18 months.

21 September 2021
C&I consumers currently source only about 7% of their power requirement directly from renewables. Indian corporate renewable market has grown rapidly and holds huge growth potential as companies look to reduce power purchase costs and cut carbon emissions. BRIDGE TO INDIA has built significant expertise in the corporate renewable business by working on over 30 consulting assignments and various research reports. We are organizing this conference to bring all stakeholders together and delve deeper into various market aspects. The conference will be held on a virtual platform with excellent networking opportunities for all participants.
22 September 2021
To commemorate the World Energy Storage Day(WESD) on 22 September, being recognized worldwide, Customized Energy Solutions (CES) and India Energy Storage Alliance (IESA) is organising the 5th global conference and virtual expo, which will be held virtually on 22 September 2021. WESD is a global movement initiated by various apex trade bodies working to promote and adopt energy storage, e-mobility & green hydrogen technologies for a sustainable future. The forthcoming edition of WESD is expected to attract global participation with an intent to facilitate bi-lateral trade, market development and new research and innovation, which will invite 100+ countries, 100+ regulators & policy makers, 100+ International speakers,1000+ organisations, 100+ partners & exhibitors and 20,000+ global delegates.
28 September 2021
Solar Solutions International is the largest trade show for solar energy in Northwest Europe. Now the solar market has grown up, it's time for the next step. Solar Solutions International displays more than 500 innovations and over 100 practical seminars concerning the latest in energy storage, smart products, and an ever evolving array of solar panels. As an exclusively B2B trade show, Solar Solutions International offers both exhibitors and visitors the chance to network at the highest level. Duurzaam Verwarmd, the largest trade show for sustainable HVAC technology in the Benelux, is held simultaneously. This way your one visit gets you up to date with all of the developments in both sustainable energy and heating.
6 October 2021
Intersolar Europe is the world’s leading exhibition for the solar industry. It takes place as part of The smarter E Europe – the continent’s largest platform for the energy industry. Under the motto “Connecting solar business,” manufacturers, suppliers, distributors, service providers and project planners and developers from around the world meet in Munich every year to discuss the latest developments and trends, explore innovations firsthand and meet potential new customers.
6 October 2021
The future is bright for a new era of US solar and storage, and the 8th annual Solar & Storage Finance Summit will provide opportunities to discuss solutions to the industry’s challenges and provide a networking platform designed to bring together the top minds in the industry to do business. With a mix of high-level, informative presentations and panels, a stellar cast of speakers and audience members with deal-making capacity, the 2021 edition of the event will be a sell-out success.
18 October 2021
Intersolar South America, South America’s largest exhibition and conference for the solar industry, takes place at the Expo Center Norte in São Paulo, Brazil on October 18–20, 2021, and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. At the accompanying Intersolar South America Conference, renowned experts shed light on hot topics in the solar industry.

Read Next

PV Tech Premium
September 21, 2021
Pressures on PV plant performance have led the solar industry to be more demanding and forensic of the data operational projects generate, as well as the power. Jules Scully explores the growing role software is playing in the utility-scale solar arena and how it must evolve further still to meet expectations.
September 21, 2021
A round-up of the latest news from the US PV sector, including project developments from Ørsted, Candela Renewables and CEP Renewables.
September 21, 2021
New York’s governor has proposed an expansion of the NY-Sun distributed solar incentive programme and revealed plans for two transmission projects that will transport renewable energy to New York City to help the state reach 70% renewable electricity by 2030.
September 21, 2021
German solar installer Enpal has raised €345 million (US$405 million) in debt financing to fund the deployment of more than 15,000 household solar PV systems
September 21, 2021
India added 521MW of rooftop solar in Q2 2021, an increase of 517% compared to the 85MW added in the same quarter last year despite a slight increase in costs, according to a Mercom India report.
September 21, 2021
Private equity firm American Securities has secured a deal to acquire US solar engineering, procurement and construction (EPC) provider Swinerton Renewable Energy and its operations and maintenance (O&M) subsidiary SOLV from Swinerton Incorporated.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
Solar Media Events
December 1, 2021