of oversupply might not be entirely good as a boom this big is almost
certain to lead to a big shake-out.
PV equipment spending plunging in 2011: Solarbuzz
July 12, 2011 - Spending on solar PV equipment for both c-Si
(ingot-to-module) and thin-film panels will be throttled back in 2011 even
as revenues soar, thanks to "ambitious" Tier 2 and Tier 3 manufacturers'
expansions in the past six quarters, and will dent both 2H11 tool sales and
2012 outlooks, according to Solarbuzz.
As a result of the projected -47% Y/Y decline to $14.2B, look for market
oversupply and a strong inventory build in 2H11, and ultimately a
"significant cell manufacturer shakeout" from 2012-2014.
PV equipment spending actually showed its inflection point in 2Q11 with a
-3% decline to $3.6B, the first slip in two years (2Q09); the book-to-bill
ratio similarly dipped below the 1.0 parity mark (fewer orders coming in
than sales going out), down from a high of 1.74 just a year ago -- which in
fact heralded a coming digestion period. The big numbers throughout 2010
were really "a misleading picture for PV equipment suppliers," notes
Solarbuzz senior analyst Finlay Colville. Those Tier -2 c-Si makers with
starry goals were joined by a host of new thin-film fabs financed with a
recent investment cycle, creating "an artificial peak in equipment spending
during 2010-2011" and a short-term run on equipment "that was out of sync
with the long-term requirements of the industry."
Who will be hardest hit in this PV equipment spending downturn? c-Si
cell/module tool suppliers can expect quarterly declines of -21%, -12%, and
-37% from 4Q11-2Q12, with thin-film spending following a similar path as
another TF investment phase closes during 2H11. Only those c-Si equipment
suppliers with established upstream footing -- GT Solar, Meyer Burger,
Applied Materials, Jinggong -- were spared the 1H11 dropoff.
As equipment spending heads south, expansions across all tiers (>300
manufacturers) are poised to add a great deal of annualized capacity over
the next two years: 51GW in 2011, 66GW in 2012. But within that ramp-up,
Tier 1 makers alone will supply 24GW and 34GW in 2011-2012, which is all the
global market really needs, notes Solarbuzz. Thus, it's time for a cell
manufacturer shakeout, to push us back to a reset in revenue and equipment
spending. Tier 2-3 PV manufacturers will take this one on the chin, with 60%
of their spending vanishing in 2012; by 2015 more than two-thirds (70%) of
all PV equipment spending will come from Tier 1 players, expects Colville.
In the meantime, look for continued inroads from suppliers in adjacent
market segments (e.g. semiconductors and display) seeking higher-growth
markets.
PV equipment spending forecast scenarios in US $M. (Source: Solarbuzz)
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