Revenue soars, but JA Solar plans upstream investments as costs surge as well

By Carrie Xiao
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JA Solar said the transition to larger wafers was a trend being reflected in its capacity expansion plans. Image: PV Tech.

JA Solar has disclosed plans to invest up to RMB5 billion (US$773 million) in upstream silicon rod and wafer projects after witnessing its operating costs soar in the first half.

Last week JA reported its H1 2021 results, reporting a near-48% increase in revenue to RMB16.2 billion (US$2.5 billion). However in the same period the ‘Solar Module Super League’ (SMSL) member witnessed its operating costs soar by more than 60% year-on-year to just over RMB14 billion (US$2.16 billion).

JA said its cost base had risen on the back of increasing shipments, the costs of which were exacerbated by rising raw material costs.

Net profit for the period stood at RMB713 million (US$110 million), a marginal year-on-year increase of 1.8%.

Having already invested nearly RMB2.6 billion (US$402 million) in capex for manufacturing capacity expansions in the opening half of 2021, supporting some 11 ongoing projects, the company is now seeking to raise capital to invest in silicon rod and wafer projects.   

Capital raised will be used to support the development of 20GW mono silicon rod and 20GW mono wafer projects, as well as an efficiency PV cell R&D pilot project and to bolster working capital accordingly.

The 20GW mono silicon rod project and the 20GW mono wafer project will be implemented by the company’s subsidiary Qujing JA Solar Co. Ltd. The plan is to build up production lines within two years, and gradually start production from the second year onward. The total investment will be RMB5.9 billion, and RMB 3.2 billion of the capital raised will be used for these projects.

The company declared that the implementation of the project, which is in line with with the trends towards larger wafers, would contribute to the overall layout of the PV industrial chain, matching the cell/module capacity already established and being established.

By the end of 2020, JA Solar had established 23GW of module capacity, 80% of which were upstream silicon wafers and cells. According to the schedule of its projects under construction, the company expects to achieve 40GW of module capacity by the end of 2021, as the new efficiency cell and module capacity will be gradually commissioned at its manufacturing bases in Yiwu, Yangzhou and Ningjin city.

Growth in downstream module/cell capacity will greatly contribute to absorb the output of the 20GW mono silicon rod and 20GW mono silicon wafer projects.

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