First Solar No Longer Number 1

U.S. thin film manufacturer First Solar lost ground in Q3’10 according to the latest analysis from IMS Research. Having been the largest producer of PV cells for 6 consecutive quarters, in the third quarter of 2010 the company increased capacity just 2%, moving it into third position behind Chinese companies Suntech and JA Solar.

IMS is predicting that even though demand will weaken in 2011, First Solar will gain market share when it increases production capacity through new production facilities that are expected to come over the next two years. First Solar recently announced that it would be expanding capacity by opening two additional four-line plants in the U.S. and Vietnam in 2012 in addition to previously announced expansions in France, Germany and Malaysia. 

These expansions would suggest that the thin film supplier’s production capacity will reach over 2.7 GW by the end of 2012 at current line run rates. However, given its history of improving throughput, IMS Research estimates that its capacity could in fact reach over 3 GW by then.

IMS PV Research Analyst Sam Wilkinson commented, “Whilst much of the industry has indicated uncertainty and a possible reduction in demand in 2011 with Germany’s small commercial segment likely to decrease the most in MW terms, First Solar is expecting an increase in demand for its products and a need to accelerate capacity expansions.”

Wilkenson explained that First Solar expects increased demand to be the result of large solar plants being installed in Europe and North America.

“IMS Research forecasts significant growth for First Solar’s primary market – utility-scale PV installations in 2011, with these systems projected to grow five-times faster than the rest of the market,” Wilkinson said.

Although its position in the PV module market continues to decline for the moment, the world’s largest producer of thin film technology recently reported that revenues had increased 36% over the previous quarter to reach record levels upon the completion of its 80-MW PV plant in Ontario, Canada. 

Assuming demand for First Solar modules remains high enough to keep the additional lines highly utilized, these capacity expansions will help First Solar reduce costs and further outpace its competitors. Already the market leader in reducing module costs, the US supplier announced that it had achieved a record low of $0.74/W in Q2’10. With high demand and tight supply currently maintaining high upstream prices for crystalline PV module prices, First Solar looks ideally poised to regain market share in 2011, according to IMS.

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