Huge consolidation in upstream solar predicted for 2013

11. January 2013 | Global PV markets, Industry & Suppliers, Investor news, Markets & Trends | By:  Max Hall

Market research consultant IHS iSuppli has offered a characteristically brutal prediction of the consolidation it expects in the global upstream solar market this year.

A solar array in Chile.

The world's biggest photovoltaic poly producers have already sewn-up relationships with EPC contractors in Chile, warns IHS iSuppli.

The group's IHS Solar Service is forecasting the number of companies involved in manufacturing at every stage of the process globally, from raw polysilicon to modules, will shrink some 70% from around 500 to 150.

That follows smaller consolidations from 750 companies in 2010 to around 650 in 2011.

"It would be a major understatement to say that consolidation is occurring in the PV supply chain this year," said Mike Sheppard, senior photovoltaics analyst with IHS. "Most upstream PV supply operations will simply cease to exist, rather than being acquired by other companies. Most of these suppliers actually have already stopped production—and will never restart."

IHS is predicting the companies that will find it toughest to see out 2013 are integrated suppliers – many of them in China; T2 polysilicon manufacturers and smaller thin film producers.

The forecaster says the cost of production facilities for integrated suppliers is too high and the Chinese government will not subsidize all of the current players.

Regarding T2 polysilicon producers, IHS says life will be tough for those not bolstered by domestic content requirements and the survivors will have to move swiftly to establish relationships with EPC contractors in emerging markets that are too young to have forged working arrangements with the global poly giants who can offer the lowest prices.

The group warns that in India and Latin American countries like Chile, that ship has already sailed.

Finally, the forecaster says that unless the price of thin film plunges at the same price as crystalline polysilicon in the next 12 months, it will be reduced to an uncompetitively-priced niche market, forcing lesser producers to the wall.


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