The manufacturing capacity of crystalline silicon solar panels is set to grow by about 80 percent this year as producers, especially in China, hastily build out factories.
The added capacity should amount to between 11 gigawatts and 13 gigawatts – or roughly the equivalent of this year’s entire market demand, equipment supplier Applied Materials said Wednesday. The company expects sales this year to be above 12 gigawatts.
Crystalline silicon solar cell manufacturing equipment
It’s “a heck of a lot of capacity,” CEO Michael Splinter said on a conference call. “There is a huge expansion in China.”
The onrush of new capacity is likely to lead to further price declines in coming quarters. It also could pressure profit margins at producers.
Applied offered its observation on a third-quarter conference call, where it said it saw solar demand increasing next year in addition to supply. Growth in Germany, the world’s largest market, could moderate from this year. But sales elsewhere in Europe, in China and in parts of the United States should increase.
The company has a particular good vantage point from which to observe production increases since it sells manufacturing equipment to the industry. On the conference call, it said:
*Spending on equipment to make crystalline silicon panels should double in 2010 to $8 billion.
*The utilization of fabs, or factories, has improved.
*The factories of the 10 to 15 largest producers are “fully loaded” and can’t keep up with demand.
*Producers have not yet begun to slow capacity growth. “We haven’t seen signs of a pull back at this point,” says Splinter. “We just see very strong orders.”
Applied said third-quarter sales in its energy and environmental solutions business more than doubled from the second quarter to $387 million, led by its crystalline silicon business. Orders, however, fell to $353 million. In late July, the company killed its SunFab product line for thin-film solar cells manufacturing.
As a result of the SunFab decision, Applied took a quarterly charge of $405 million, which forced the business unit to post an operating loss of $371 million.
Applied said that despite its SunFab decision a Chinese customer is considering a factory and could make a decision whether to go ahead in the fourth quarter.
This is excellent inforation – thanks for the write up. I really enjoy your blog and will be certainly coming back.
I find myself traveling to your site simply because you have several positive views and you have a few articles like Huge Expansion Of Solar Production Capacity Continues , that is really cheering and suggests you have some knowledge on this. I’m forthright and genuine, that way everyone acknowledges what I feel.