PV Taiwan 2013: PV manufacturers cautiously adding capacity

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A common theme at PV Taiwan 2013, being held in Taipei this week, has been a series of solar cell and module manufacturers cautiously planning incremental production capacity expansions as the global PV market demand continues to pick up.

Factory utilisation rates in the third quarter remain at effectively 100% with demand from customers driven by the boom in the Japanese market, notably for residential rooftop markets in which Taiwanese producers’ higher quality and performance products are in high demand.

According to the Taiwan PV trade association, TPVA, major cell producers such as Motech, Gintech and NSP, with the combined number of cell producers in Taiwan, are expected to have solar shipments of 37.7GW in 2013.

At the well attended and strongly upbeat ‘Executive Summit’, in conjunction with the technical conference PVSEC 23, Dr. Wen-Whe Pan, president of Gintech, noted in a presentation that “[the conditions for] cell and module manufacturing has improved, oversupply has decreased”.

Dr. Pan added that many tier two and tier three players had “faded away”.

As a result, recent assessments of the solar cell market indicated that Taiwan solar cell producers’ share of the global cell market would in 2013 increase to around 22%, up from 19% previously.

However, the massive overcapacity in the industry, driven by Chinese companies’ rapid expansions in recent years, impacted prices and pushed Taiwanese producers into an extended period of financial losses.

Though demand has rapidly recovered quarter-on-quarter in 2013, resulting in fully loaded production plants, many Taiwanese producers are currently adding a limited level of new capacity at existing facilities as order visibility through 2014 has improved considerably in recent quarters.

Andy Shen, president of Neo Solar Power, told PV Tech that solar cell capacity at its existing plant would reach 2.1GW by the end of 2013. However capital spending had remained constrained, he added.

“At this moment I am being very responsible and cautious about using the words ‘capacity expansion’, when there is still overcapacity,” said Shen. “Let me clarify that the way we are doing capacity expansion is by capacity optimisation. We are doing retro-fit and upgrades to our existing manufacturing footprint.”

Shen noted that due to throughput productivity imbalances from [cell] front-end to back-end processes, NSP was adding specific new tools to better optimise existing lines, while raising cell efficiencies, which gives increased overall capacity improvements.

“You will see our capacity incrementally expand by these practices,” added Shen.

Shen also noted that since the merger with Del Solar, module capacity is also being ramped to 500MW by mid-2014. However, Del Solar’s modules are almost 100% dedicated to the OEM market and the capacity expansion is designed to meet a growing trend of key customers in Europe and Japan, primarily integrated tier one module manufacturers, outsourcing an increasing percentage of production.

Robert Yang, president of module manufacturer, Apollo Solar Energy, sister company to major solar wafer producer, Green Energy Technology (GET), told PV Tech that the company expected to reach a new capacity level of 360MW in the first quarter of 2014.

Winaico has also recently added capacity to bring annual production to 150MW, but Sasha Rossmann, vice president of sales and marketing at Winnaico told PV Tech that although further capacity expansions were planned, “we would be adding capacity but in line with market demand”.

However, an area of production that could become an important catalyst for expansion is Winnaico’s 1MW per month of production of modules using high-performance PERC cells.

Rossmann highlighted that demand was being driven by the Japanese and European residential markets as well as growing interest and demand in Australia that could result in PERC-based modules ramping to higher monthly levels.

“The Japanese residential market is sustaining between 450-500MW per month of installations and could be around for the next 10 years, noted Rossmann.

However, while Taiwan executives consistently stressed that market dynamics had improved significantly and that key growth end markets such as Japan and the US provided much needed market visibility, none wanted to be typecast as fuelling the next wave of overcapacity.

Taiwanese manufacturers consistently emphasised that capacity expansions were driven by customer demand and that they would cautiously meet that demand with incremental capacity expansions.

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