Asian Electronics "Giants" Making Their Presence Known in Photovoltaics Sector

Large Asia-based electronics firms, such as Samsung and LG, continue to enter the growing PV market, transferring their expertise in other cost-driven fields and are aiming to capture a major share of the market. In a recent report, IMS Research predicts that Asia's share of PV cell production will reach nearly 85% by the end of this year.

Although the market is currently rife with fears of a module oversupply, these large Taiwanese and Korean electronics suppliers, including Samsung, LG, AUO and Taiwan Semiconductor, have all recently announced impressive expansion plans for their solar business segments.

IMS Research expects that following the rapid PV cell and module capacity increases in 2010 - when demand boomed in major European markets - lower incentive rates and the slowing of installation growth will lead to an oversupply of PV modules this year. In particular, small tier-two suppliers are predicted to be most affected, with larger tier-one suppliers still able to sell the majority of their products.

However, the long-term outlook remains positive, and IMS Research believes that total industry demand will continue to grow at double-digit rates on average for the next four years. As a result, a continuous stream of hopeful new entrants exists, and the most successful of these are likely to be these Asian consumer electronics manufacturers joining the pack.

AUO Optronics, a Taiwanese supplier most known for its flat-panel displays, recently broke ground on a 1.4 GW cell production joint venture with SunPower, the report notes. Meanwhile, LCD television company Samsung recently announced a joint venture producing polysilicon with MEMC, further expanding its activities in the solar sector.

Although not a consumer electronics company, Taiwan Semiconductor also plans to begin offering both thin-film and crystalline modules following its investments and partnerships with Motech, Stion and Centrosolar, IMS Research adds.

"The expertise of these large Asian suppliers at large-scale production in similar fields and their willingness and ability to invest significant capital is likely to mean that they are able to quickly reach low-cost and high-volume production, and they certainly have the potential to be serious competition for today’s market leaders within a few years," says Sam Wilkinson, PV research analyst. "Many suppliers are currently experiencing a lull in shipments, and it is likely that demand may remain weak until later in the year.

"The entrance of a number of large electronics suppliers that will offer competitively-priced PV components is likely to add some further obstacles for existing suppliers in an already volatile market," Wilkinson continues.

IMS Research estimates that nearly 80% of PV modules were produced in Asia in 2010 and predicts this figure will continue to rise in the future.

SOURCE: IMS Research

IMS Research forecasts 75% of global PV production to take place in Asia by end of 2011

One of the biggest pressures that the solar module industry faces is the ability to produce a solar module at a lower cost. Due to this demand in pricing, IMS Research has concluded that over 70% of module production capacity is made in Asia as of 2010’s fourth quarter. 

The trend to move production to Asia isn’t a passing one as IMS foresees that by the end of 2011, over 75% of the world’s PV production will take place in Asia.

IMS acknowledged that 2010 has been a good year for the module industry yielding strong demand, an increase in shipments and a curb in pricing demand. Conversely, as the industry prepares to enter 2011, IMS points to signs that the German market is dampening while PV suppliers throughout the industry turning their attention more frequently towards bringing down the cost of manufacturing modules.

As a result, suppliers are moving their production to Asia, where costs for producing modules bear a significantly lower cost. Using REC as an example, IMS highlighted that the company’s fully-automated Singapore-based wafer, cell and module production lines aim to make modules for €0.97 per watt by the end of 2011. Moreover, IMS cites Evergreen Solar who plans to produce modules at US$0.90 per watt at its Chinese facility by the end of 2012; a substantial change from its cost of producing the same modules at its US plant in 2010’s third quarter at US$1.88 per watt.

“It is essential that PV costs continue to decline in order for PV to become a more sustainable industry that is less reliant on subsidies, and seemingly inevitable that manufacturing will shift to Asia, much as it has done in almost every other high-volume electronics market.” commented PV Research Analyst, Sam Wilkinson (pictured). “Large Chinese manufacturers are currently leading the industry in crystalline PV module cost reduction and other Western suppliers are joining them, bymoving their own production to Asia,” Wilkinson concluded.

Source:   PV-Tech.org