Analysis: Longi mono wafer expansion plans could yield H2 oversupply

Longi Solar’s announcement today that it is to seriously ramp up its production of monocrystalline wafer capacity over the next three years could lead to a serious oversupply problem for mono wafers in the second half of the year.

That is according to independent solar analyst Corrine Lin, who told pv magazine that global demand for mono wafers is likely to be around 40 GW over the course of the year.

Longi Solar’s plans are to reach 28 GW of capacity by the end of 2018, which would see it surpass GCL as the world’s largest mono wafer supplier.

GCL’s targeted 23 GW mono wafer capacity goal, combined with Longi’s planned 28 GW capacity for the year (which would make Longi the world’s biggest wafer company), will likely expand global mono wafer supply to 73 GW in 2018, up from 44.5 GW last year.

Based on a forecasted global PV demand of around 95 GW to 105 GW, and with mono expected to account for 40% of the market share, the second half of the year could see an imbalance in mono wafer supply and demand.

In such a scenario, Lin says, mono wafer prices could fall sharply as the year ticks by, forcing many smaller mono wafer suppliers out of the market. “Even tier one mono wafer companies could see their margins shrink dramatically, much lower than last year,” Lin said.

However, despite these potential upheavals, mono’s share of the wafer market will continue to increase, even in the face of an uptick in multicrystalline wafer demand driven by the proliferation of diamond wire-cut produce.

Looking ahead, mono wafer capacity could rise to 83 GW by 2019 (against multi at 117 GW), and 93 GW by 2020 (against multi at 121 GW), Lin concluded.