PV Talk: A steady return to health for PV tool manufacturers

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Although one of the defining trends of 2014 was the flurry of PV cell and module capacity expansion announcements, PV manufacturing equipment suppliers are only just starting to see this translate into new orders. Ben Willis asks Stephan Raithel, managing director, Berlin, and director, PV Europe, of trade association, SEMI, what 2015 holds in store for this battered segment of the upstream PV industry.

SEMI's Stephan Raithel: 2015 will see a steady change in fortunes for PV tool manufacturers. Image: SEMI

Your latest book-to-bill report for PV manufacturing equipment showed mixed fortunes for the industry last year: a spike in Q1 followed by a tail off over the year, but overall better news than 2013. What does this tell you about the state of the equipment industry?

Yes, we saw a decline of 17% quarter on quarter in Q3, but an improvement of roughly 35% year on year. So we’re above the previous period, but there was a decline towards the end of the year. I would not necessarily put this in direct connection to the state of the equipment industry, which I would consider overall to be prepared for any upcoming scenario. Still it will be a challenging environment, that’s for sure. The market is still very tough; despite having fewer players in the market it’s very clear that those who are supplying to the device makers are in a constant competition with each other and it’s not getting any easier.

Nevertheless I think the main reason for the backlog of bookings and billings in Q2 and Q3 is really because of political decisions in subsidy programmes, local content regulation, trade conflict… So it’s not about the state of the industry or any technology; it’s third-party. Overall I would consider the equipment industry prepared and in a rather stable condition compared to one or two years ago. They’re usually the first ones to get hit by and downturn and the last ones to benefit from an upturn.

SEMI Q3 book-to-bill report. Source: SEMI.
Market share forecasts for casted and mono-Si materials. Source: IRTPV.
Market share forecasts for different c-Si cell concepts. Source: IRTPV.

One of the points mentioned in your last report was that Asia is the largest market for new equipment. What visibility do you have of where Asian manufacturers are buying their equipment from – from the West as in previous buy-cycles, or from domestic suppliers?

We do see and have seen in the past that when it comes to for example module or module lamination equipment, China has a very strong base. So the market share in lamination is dominated by Chinese equipment makers. That has always been the case. We do see also some companies in wet chemistry coming from China.

I cannot judge who is delivering the higher quality – that’s up to the customer to decide. But China as the biggest market is speeding up and they have clear policies to be leading in technology – technology in equipment, not just technology like cells and modules. So that is definitely something to watch. We see in the semiconductor industry, which PV is a part of, that there is a big investment programme in China ongoing to actively search for technology and for partners to be manufacturing in China.

I do believe however with a very strong bandwidth in machine making, Europe, especially in Germany and Switzerland, has a very strong base and will be extremely competitive in the future. If you look at what Schmid is selling around the world, for example, that speaks for their quality.

So you think that although there will be a shift to Asian suppliers, European companies will hold their own?

Absolutely. The technologies coming out – multi-busbar concepts, glass-glass modules and so on – are becoming more and more complex, and speak of integrated manufacturing. You therefore need to understand the manufacturing process, which is easier for companies that have a long experience in machine building to offer.

Indeed, we’re hearing a lot about new technologies being integrated into production lines. To what extent are you seeing that reflected in orders coming through, or will orders remain dominated by standard technologies?

I think there is a market for both. Our research suggests that you’ll see in the next few years a diversification. You’ll really see a mainstream on crystalline silicon that will be in the range of over 90% and determine already some classes of the technology that will be in mass manufacturing. But within the crystalline market you’ll have a nice diversification between multi and mono that could be, depending on the materials market, in the range of 50-50, 60-40, 70-30. And within those markets you’ll definitely see, depending on the region, depending on the manufacturer, a diversification which is hard to see right now. But obviously if you go into new investments, totally new, you’ll look for the latest state of the art. If you’re just upgrading you’ll see what you can get within your existing equipment line.

And what about thin-film? Thin-film has had a pretty hard time of it in recent years. Do you foresee it enjoying any change of fortune?

We mainly follow crystalline silicon trends, but looking at all the presentations from equipment and materials suppliers recently at the Forum Solarpraxis in Berlin, all speakers that supply either materials or equipment did not see thin-film having a market share over 10% in the future. So I think you two or three players that will further grow that market (because 10% will obviously be bigger overall in future), but in comparison to crystalline you won’t see a big change.

We’ve seen all the big manufacturers announce capacity expansions now. Do you think this year we’ll see that uptick filter through to the equipment suppliers?

Yes, but not in a big flash all in one quarter. I think this will happen step by step; manufacturers are and will remain careful on new investments. The industry is on a level pretty much comparable to the semiconductor industry: people think on a quarterly basis, they watch their cap-ex. So those crazy times we had in the past are not coming back. There will be growth, steady growth if nothing happens on a bigger economic scale. But I don’t expect a huge increase in a certain month.

If you look at the installation forecasts, even the more positive ones, they talk about 55GW this year. That’s about a 10% increase year on year, which does not speak for a huge capacity increase at a certain moment. Obviously if everyone wants to follow a 10% or even 15% increase year over year, then you need to constantly show growth in the manufacturing landscape, and I would say that most of the manufacturers still can tweak their efficiencies, so increase output by that. But some of them obviously are looking into new fabs, new capacities, which will result in new lines.

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