Last week, Lux Research released its Q2 2010 Solar Supply Tracker (client registration required), which updates our figures on production and capacity throughout the value chain through 2013. Regular readers of the Tracker will find the most important update since Q1 is in the recent version’s demand forecast, which has been increased to 15 GW of market demand in 2010, driven by a surge in Germany and Italy ahead of 2011 feed-in-tariff reductions. We discussed this following PVSEC in Valencia a few weeks ago (see the September 16, 2010 LRSJ – client registration required).
On the supply side, Tier 1 and 2 module manufacturers are poised to produce 14.8 GW in 2010. Figuring in Tier 3 players for the “high case” scenario shows a potential for 18.0 GW of production in 2010. However, even with this greater-than-expected demand, Tier 1 and 2 module manufacturers maintain oversupply with 20 GW of capacity.
In Q2, crystalline silicon (x-Si) increased its technology dominance, reaching 79% of module production. Thin-film silicon (TF-Si), led by large manufacturers like Sharp and Bosch, and cadmium telluride (CdTe), dominated by First Solar, each account for about 9% of total production. Together, these three technologies make up nearly the whole module market. Copper indium gallium diselenide (CIGS) modules are still being produced in small quantities, but will quickly grow more than 1 GW if Solibro, Miasolé, and Solar Frontier execute plans for large capacity expansions over the next several quarters.
Geographically, Asia increased its dominance in module manufacturing, accounting for 75% of production in Q2 as more European capacity became unviable and low-cost Asian manufacturers like Trina, Yingli, and LDK added capacity in the downturn. On the polysilicon front, Wacker added European capacity, increasing the EU’s production share to 20% from 17% the previous quarter. However, Asia still holds the largest share at 43%.
A number of key market shifts occurred in Q2 throughout the value chain. Chinese polysilicon producers were a mixed bag as several low-cost manufacturers, including Jiangsu Shunda and Sichuan Xinguang, shut down for retooling or recapitalization while new entrants Yongxiang and Fine Silicon (owned by Yingli Green Energy) were still ramping production. Meanwhile, demand in 2010 will reach 100,000 MT and exceed the 75,000 MT production of the six top polysilicon producers – Hemlock, Wacker, GCL, OCI, REC, and MEMC – providing room for new entrants like Daqo New Energy. Further downstream, wafer supply is increasingly constrained in the face of strong demand and will hit 78% capacity utilization in Q3. Low-cost Asian manufacturers continue to dominate this segment, with GCL Silicon, Kyocera, and Green Energy Technology moving into the top 11. Strong demand has spurred several companies to make aggressive expansions in cell and module production. JA Solar led the charge in cell production, rising into the top 3 in Q2 and positioning itself to overtake the entire field by capacity in Q3. It has also integrated downstream into module production, along with China Sunergy, through acquisitions. Although these companies are emerging as new leaders, the top five module manufacturers remained unchanged from Q1, with the exception of Suntech Power, which overtook First Solar at the top spot in Q2 with 1.4 GW of capacity.