By Fatima Toor, Analyst, Lux Research Inc.
Production equipment is the backbone of the PV industry, but the equipment sector is suffering because of overcapacity. The 2012 global capacity utilization is at 55% for crystalline silicon (x-Si) module production, 70% for cadmium telluride (CdTe) and 80% for copper indium gallium (di)selenide (CIGS). Under these market conditions, there are almost no expected capacity expansions in the near term. The overcapacity has driven the average selling price (ASP) for modules significantly lower, resulting in hyper-competition in the PV industry, where almost all PV companies recognize the importance of product differentiation while still reducing costs. These market conditions present an opportunity for equipment manufacturers to differentiate their offerings through enabling lower production costs and higher efficiency of cells and modules.