A period of equipment digestion or what's known as a reset could be at play after aggressive capacity expansions across the PV supply chain in 2010, according to the PV book-to-bill analysis featured in the forthcoming “Solarbuzz PV Equipment Quarterly” report. According to Finlay Colville, senior analyst at Solarbuzz, the PV book-to-bill is forecast to dip sharply below parity before rebounding in Q4’11.
The PV book-to-bill ratio compares new-order intake to revenues recognized within a given period. It is the ratio of demand to supply in the equipment supply chain. A ratio of 1.01 for Q1’11 means that US$101 of new orders was received by PV equipment suppliers for every US$100 of recognized product revenues.
According to the report, the PV book-to-bill posted a three-month average of 1.01 in the first quarter of 2011. The healthy ratio, a legacy of aggressive capacity expansions in 2010, is expected to be replaced by a weakening equipment ordering period.
Overcapacity and a weak end-market are making many tier 2 c-Si manufacturers from China hold back on further expansions until the market improves.
Solarbuzz’ analyst expects a new wave of new-order intakes will be driven by polysilicon fab expansions and the next phase of c-Si ingot-to-module equipment spending in the fourth quarter of 2011.
“Tool suppliers that are waiting for repeat business from these customer types and those without sufficient exposure to leading Asian producers will be most at risk during 2012,” added Colville.
The report states that “2009 and 2010 were characterized by huge PV equipment demand in an environment where even tier 2 and 3 PV manufacturers had little difficulty accessing finance for their capacity expansions. However, 2011 and 2012 represent a harsh reality check on tool makers’ order books as manufacturing expansions retrench primarily to tier 1 companies. Sharp declines in book-to-bill ratios are currently being posted by equipment suppliers that have been overdependent on c-Si expansions in Europe, tier 2 c-Si spending from China, and speculative thin-film investments.”
According to Colville, “PV equipment suppliers remain confronted by a highly fragmented manufacturing landscape, comprised of hundreds of potential customers each at varying stages of technology acceptance and product competitiveness. Understanding the role of book-to-bill ratios at the process tool level, and how each of these is likely to trend moving forward, provides an external benchmarking resource for tool makers to complement their internal marketing strategies.”