Recent revenue and shipment announcements by some of China’s major PV makers suggest that growth for end-market demand is slowing. Gartner analyst Philip Koh breaks down the trend by each of five key companies.
June 21, 2010 – Recent revenue and shipment announcements by some of China’s major PV makers suggest that growth for end-market demand is slowing.
Gartner analyst Philip Koh breaks down the trend by each of five key companies, with their sequential growth in 1Q10 (vs. 4Q09):
- JA Solar: Shipments up 17.7% to 272MW; revenue up 17.1% to $279.2M.
- Yingli Green Energy: Revenue down -3.2% to $358.9M.
- Trina Solar: Shipments up 17.9% to 193MW; revenue up 7.5% to $336.8M.
- Solarfun Power: Shipments up 35.9% to 150.6MW; revenue up 17.8% to $216.2M.
- Suntech: Shipments up 11%; revenue up 0.8% to $588.0M.
With the exception of Yingli (primarily affected by the depreciation of the Euro vs. Yuan), the major Chinese PV players showed slowing growth vs. previous quarters — and their growth in 1Q10 was mainly due to increased demand in Europe to get new PV systems installed ahead of Germany’s upcoming changes to its feed-in tariff. Coupled with the euro volatility, this could mean a weaker outlook for installations through this year and maybe 2011, and will likely affect demand since all these suppliers are significantly exposed to European markets, writes Koh. Fore example, Spain, Italy, Greece, and Portugal may mull spending cuts, reduce (or even eliminate) solar subsidies, which could dent Chinese suppliers for several quarters.
The currency valuations also could spell cost problems for Chinese suppliers, since they report costs in dollars but sales in Euros — this squeezes gross margins, and narrows the cost-advantage gap between them and European companies (e.g. REC, SolarWorld), Koh writes.
One other note about Chinese PV players: they’re expanding their horizons to help reduce production costs. JA Solar is moving into a vertically integrated business model, first with solar cells and then solar modules, and now in-house ingot/wafer production planned for 2Q-3Q10. “We expect to see it competing with the other major Chinese vertically integrated PV companies, such as Yingli Green Energy and Trina Solar, which have been using this business model for quite some time,” Koh writes.