06 May 2012
Posted in News - SPVI news
Solartech’s April sales of NT$65.4M ($22M) were a drop of 6.3% in comparison to March.
Solartech’s April sales of NT$65.4M ($22M) were a drop of 6.3% in comparison to March. When looking back to Q1 results, the company delivered a 20% increase in sales to a NT$1.6B ($57M), however this is 65% below the NT$4.9B ($169M) from last year. The top three companies in Taiwan, Motech, Gintech and Neo Solar, had a group-average revenue loss in the first quarter.
While the global list of module makers is shrinking, the remaining cell buyers consist of vertically integrated companies, a handful of European survivors and module makers in Japan.
In a case of a vertically integrated company with high cell processing costs, one time purchase externally for cash may have a benefit to gross margins, especially when product is sold at the bargain. However, after amortization is excluded, the cost of own production is often lower than a spot, removing a need for the external supply.
The cell to wafer imbalance is only 1.8GW among US-listed Chinese. To compound the problem, Canadian Solar, which bought cells from Neo Solar and Motech in the past, plans to add 500MW of cell capacity this year. LDK plans to sell enough modules to draw on its own cell supply, leaving Renesola as the only company needing more cells in 2012.
The trio of Motech, Gintech and Neo Solar delivered sales of 1.1GW, 0.87GW and 0.73GW respectively for a total of 2.7GW in 2011. Their Q1 results showed a 54% reduction in revenue compared to last year, but with a drop of over 50% in cell ASP in the last 12 months, shipments remain slightly below 2011 levels.
Outsourcing to Japan offers relief but the requirement for a high conversion and new technology is road-blocking lower tier companies without access to funding. In addition, the Japanese market does not have domestic content requirement; therefore the top-tier Chinese can outbid many, and it is not surprising they are rushing in to set up their presence in the country.
The last offset is the US anti-dumping ruling, which will be published on May 17th. So far a countervailing decision has not made much of a difference on the Taiwanese cell market. The increase in pricing is being absorbed in the module cost by the Chinese, and Taiwanese cells have a 5% or more of the premium, a lot greater than the average penalty of 3.6%.
Taiwanese wafer sales appear poor with the first month of Q2 and that spells trouble for cells. Based on numbers released by Green Energy Tech, April sales were NT$98.9M ($33M), or 0.02% over March, with a year-to-date drop of 57%. Although GET is managing shipments at least at last year’s level (revenue is 57% down versus a 70% price drop), small second-tier Taiwanese do not sell their last year’s quotas. Danen’s April sales are below March by 1.9% and year over year is a negative 83.2%. The full 2012 sales are also a negative 81%. For every watt of wafer capacity in the country there is 1.73 watts of cell capacity, a local paradox since wafer supply is greater than cell supply globally, therefore weak domestic sales of wafer add to concerns about market for Taiwanese cells.
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