PV tool demand plunges in 3Q11, no visibility yet

December 15, 2011 - Demand for PV manufacturing equipment sunk to a six-quarter low in 3Q11, down -24% sequentially to $1.6B as bookings practically fell through the floor, continuing a multi-quarter decline, according to updated data from SEMI. The 3Q11 book-to-bill (B:B) ratio was a miniscule 0.35, meaning just $35 worth of orders came in for every $100 of sales recorded. Bookings, which sunk -70% in 3Q, have been on the decline since 1Q11.

The SEMI numbers, gathered jointly with the German Engineering Federation (VDMA) from about 50 global equipment companies, echo those a month ago from Solarbuzz, which similarly showed a plunge in new orders vs. a peak in shipments.

The problem is clear: aggressive capacity expansions by PV cell/module makers in 2010 (and even early 2011) have run their course -- some orders have turned into sales, but a lot have just fell by the wayside as manufacturers delay or outright cancel their expansion plans. And now we're left with a period of digestion and reduced demand.

One only needs look at the latest quarterly results -- including today's reductions at bellwether First Solar -- to realize the cloud that hangs over the industry given the current challenging environment and lousy visibility. "The expectation is that bookings will not significantly improve in the next six months without policy adjustments in Europe, Japan and China, combined with easing of credit markets and improved economic growth," SEMI warns.