IMS Research says that due to significantly lower demand for new manufacturing capacity, coupled with limited orders for equipment upgrades or replacement of existing capacity, revenues are set to drop 55 percent from USD$12.8 billion in 2011, to $5.7 billion in 2012.
The gloomy market situation, says the company, is a result of considerable overcapacity, caused by the boom of heavy investment by photovoltaic product manufacturers, which were looking to increase their market shares.
"Massive over-capacity, coupled with a reduction in demand, has led manufacturers either to postpone or, where possible, cancel orders for new manufacturing equipment, at least in the short term," commented senior research analyst, Tim Dawson.
He went on to says that all is not lost though, with an "inevitable" return to growth predicted for 2013, driven by a steady, rather than sharp recovery, "as companies look to invest once again in new equipment to remain competitive, improve their production processes, increase cell efficiencies, and reduce the cost per watt associated with the ultimate end product."
The news underpins Solarbuzz’s last PV Equipment Quarterly report, released in October, which predicted that global photovoltaic equipment spending will fall by more than 45 percent in 2012.
Furthermore, IMS’ findings tie in with those of VDMAs, the German Engineering Federation, which published new order figures for German photovoltaic machine manufacturers. In its report, it was stated that the expectations of these manufacturers will not be fulfilled in the current financial year. Meanwhile, the 2012 market environment is also forecast to remain difficult.