NEW YORK (
) -- I noted last week in my article,
that in 2010 the solar industry will exhibit capacity utilization of 25.7%; inventory will be stretched to 133 days; average selling prices could drop below $1 a watt in 2010 and 50 cents in 2011; and as many as 50% of the more than 200 solar manufacturers, mired in red ink with current selling prices above $2 a watt, may not survive.
In addition to the failure and consolidation of the solar panel manufacturers, companies supplying equipment to manufacture panels will be severely impacted. Two things will happen. The obvious impact will be the loss of customers of equipment suppliers.
Next, solar manufacturers, in their exuberance to increase capacity from 17.6 gigawatts in 2009 to 24.2 GW, will initially purchase equipment only to have it sit idle in factories as inventories stretch to 133 days. As these companies close or consolidate, this equipment will then be sold on the secondary market, further exasperating revenue growth for equipment vendors.
The equipment companies currently are experiencing a slowdown because even though solar customers want to make purchases, financing is still tight. Going forward, the largest solar manufacturers will survive as a customer base. Chinese solar manufacturers, who prefer to purchase low-cost equipment from Taiwan, also will survive, as the Chinese government will subsidize their survival through stimulus packages.
I also noted in my Sept. 1 article on
that solar panel manufacturers who have reported losses just in the past few weeks include
Energy Conversion Devices
Yingli Green Energy
Interestingly, five of the six companies are Chinese. They continue to increase inventory, lose money, and effect the entire solar panel industry. Perhaps it is an attempt to become the worldwide leader in the solar market by eliminating the competition.
In 2008, the top 10 equipment manufacturers of the $4 billion market were:
-- Written by Robert Castellano in New Tripoli, Pa.
Robert N. Castellano, Ph.D, is President of The Information Network, a leading consulting and market-research firm for the semiconductor, LCD, HDD and solar industries. Castellano is internationally recognized as one of the leading experts in these areas. He has nearly 25 years of expertise as an industry analyst. Castellano has provided insight on emerging technologies to many business and technical publications, including Business 2.0, BusinessWeek, The Economist, Forbes, Investor's Business Daily, Los Angeles Times Magazine, The New York Times, USA Today and The Wall Street Journal. He is a frequent speaker at conferences and corporate events. He has over 10 years' experience in the field of wafer fabrication at AT&T Bell Laboratories and Stanford University before founding The Information Network in 1985. He has been editor of the peer-reviewed Journal of Active and Passive Electronic Devices since 1985. He is author of the book "Technology Trends in VLSI Manufacturing," published by Gordon and Breach. His book "Solar Cell Processing" was published in 2009 by Old City Publishing. He received his Ph.D. in solid state chemistry from Oxford University.