It added that forecasts indicate capacity will reach 33 GW by the end of the year, over 80 percent of which will be for crystalline cell technologies. The research company warns, however, that gross margins will fall next year.
Megawatt shipments of PV modules grew 15 percent in Q2’10 over Q1’10, according to IMS’s latest market report. This growth, it said, marked six consecutive quarters of increasing shipments and took total modules shipped for the first half of the year to over eight GW, which is only "slightly less" than for the whole of last year. Furthermore, revenues generated by PV modules in the same period amounted to over USD$15 billion.
“With module demand so high, it is not surprising that new cell production lines are being added at a frantic pace to capitalize on the booming market,” said the company. “However with demand looking uncertain going into 2011, a dramatic slowdown in growth imminent and likely weak Q1’11 and increasing poly prices, gross margins of cell suppliers are looking particularly vulnerable.”
Asia’s share of cell capacity also continued to increase in Q2’10, continued IMS, which added that its research predicts that it will continue to increase through to the end of this year.
“Asia has continued to add cell capacity faster than other regions throughout 2010, further increasing its already huge share of global production capacity,” commented Sam Wilkinson, PV research analyst.
“As many of the key incentive schemes that drive the market today continue to reduce, companies remain more focused than ever on reducing costs and we have seen many leading European suppliers such as Solarworld, Q-Cells and REC shifting to factories in Asia in an attempt to compete with the low costs of their Asian competition.”
The company went on to say that it expects that nearly 80 percent of cell capacity to be located in Asia at the end of the year, over half of which will be in China.
However, although utilization is currently high and most suppliers are running their factories at full capacity, “weakened” demand is predicted early next year and utilization is forecast to fall below 50 percent, it said. As a direct result of decreased utilization and declining prices, IMS believes gross margins will also decline.
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