While the picture is still unclear for the entire Taiwanese solar industry, the top players are staging a semi-recovery.
The preliminary data is in for the Q2 results from Taiwan, and sales of the top three manufacturers are on the uptick from Q1. While the picture is still unclear for the entire Taiwanese solar industry, the top players are staging a semi-recovery.
Starting with the top cell maker Motech, the company had disclosed to SPVI shipments of 370MW in Q2, which is a 15% increase from Q1 of 2012. The revenue reported in Q2 is expected to be around NT$3.2B (US$106M), which is a 23% growth over Q1. Despite the upswing, the year-to-date result is 51% lower than revenue to date in 2011. Investors must remember that ASP in comparison to Q2 2011 had experienced a dramatic decrease, which is behind the lower revenues. The volume of shipments has been steadily increasing, however, which reflects on steady demand and expectations of an increase in the second part of the year. The total reported volume of shipments for Motech for the first half of 2012 was 690MW; Motech operates with almost full capacity, with slight under-utilization in Mainland China (500MW capacity). The current trend, which we expect to increase, will lead to higher shipments than the 1.1GW in 2011.
Gintech, which is the second-largest cell maker in Taiwan, had delivered results that actually beat revenues from Q2 of 2011. The company had shipped 320MW of cells with revenues of NT$4.3B (US$143M), 16% higher than Q2 2011. The revenue was also 14% higher than Q1. For the first part of the year Gintech had shipped 590MW. Gintech is expanding its manufacturing capability to 1.5GW in 2012. In addition to expectations of higher volumes in the second half of the year, Gintech has been more selective in accepting orders – allowing the company to increase pricing. In Q2 the company shipped 30% of its volume to Europe, around 60% to Asia, and the rest to emerging markets and the US. The company sells mainly multi cells and some modules. Average efficiency of Gintech’s cells is around 17%
Neo Solar Power had experienced the most significant revenue growth in Q2. The results were NT$3.9B (US$130M), an increase of 27% over Q1. The company has shipped 270MW of cells, with 30% of shipments heading to the US and Japan. For the first half of 2012, the company has shipped 470MW of cells. SPVI predicts that shipments may increase as much as 30% over the first half of 2012. This will certainly beat last year’s result of 730MW in shipments made in 2011.
SPVI tracks 15 companies from Taiwan; based on results from the Taiwanese group, Q2 revenue had increased by 22.1% on average over Q1. The cell manufacturers have outperformed wafer makers. Green Energy Technology, the largest wafer manufacturer in Taiwan, had experienced 5% growth over Q1; however, YTD revenues are 51% below the level from 2011. While the entire group has experienced positive growth over Q1, the gross margins expectations continue to remain negative. The Chinese cell manufacturers like JA Solar (NASDAQ: JASO) and Hareon Solar are expected to continue to lead in cost efficiencies.
In other news, Canadian Solar’s (NASDAQ: CSIQ) CEO, Shawn Qu, spoke at the Investor’s conference today about building a cell factory in China with a capacity of 700MW, capable of producing cells with an average conversion of 19.5%. The plan is not new, as the company had planned expansion this year, but the conversion is certainly on the higher end of anything Canadian currently has in-house, especially with that scale. Trina Solar (NYSE: TSL) had entered the Canadian market with an OEM agreement made with Silfab Ontario, a unit of Italy's Silfab SpA, to assemble modules for Ontario’s growing solar demand. Recently, Yingli Solar (NYSE: YGE) had opened another new sales office, this time to access the Australian market.
Lastly, we have written a number of articles on solar cell module efficiency. While there are number of opinions to support either side of the argument as to whether conversion is an objective pursued by the solar companies beyond the R&D efforts, and into expansion of the capacities to achieve the necessary scale, the race for higher conversion continues nonetheless.
The Q-Cells module based on the “Q.antum” module achieved record performance of 301Wp, confirmed by the SGS (Societe Generale de Surveillance) Fresenius institute in Dresden, yesterday. Cells have conversion of 20.9% based on 180-micron-thick monocrystalline n-doped silicon wafer. The module, producing at a 301W peak, is built on 60 cells of 156*156mm and has a conversion of 18.5%. In the words of Mark Kingsley, CCO of Trina, as reported by Reuters, “Solar companies will start competing more on efficiency and less on price, as costs have come down far enough for most buyers.” It is hard to argue with that statement. Efficiency remains the only area where companies will be able to differentiate their market presence from each other. While the cost argument continues to be valid, scale provides the avenue for reductions. The popularity of the n-type mono wafer seems to be taking over the mono market, and while companies are pursuing cheap processing using multicrystalline wafers, the mono wafers continue to command large premiums. Furthermore, a number of companies have shown an interest in the n-type cell outside of Yingli Solar. A year ago, Trina Solar has signed a three-year research agreement with the Australian National University (ANU) to develop an n-type mono cell to reach conversions of over 20%, with the same costs of p-type cells. Some of the funding (AUD 3 million) for the project came from the Australian Solar Institute, which is part of the Australian Government's Clean Energy Initiative. Canadian Solar, which had reportedly achieved 21.1% efficiency from its ELPS cell built on p-type mono wafer, has frequently expressed interest in n-type technology and plans to introduce products in this category along the hetero-junction cell in 2013.