The Rise of China Domestic PV Equipment Suppliers

By Melody Song, SEMI

The PV manufacturing equipment segment represents a very important part of the PV value chain because of the significant technological innovation aspects of PV manufacturing that are directed by equipment suppliers.

According to the Q2’11 Worldwide PV Equipment Market Statistics Report, significant decline in order intake was reported by equipment suppliers (aggregate data). For the first time since Q1’10, worldwide PV equipment Book-to-Bill ratio dipped below parity to 0.88, and Q2’11 bookings slipped to a five-quarter low, declining 18% in Q2’11, following a 10% decline in Q1’11. While billings growth rates fluctuated quarter by quarter, the past five quarters have seen continued decline in bookings growth rates, reaching the negative territory in Q1’11.  In part, the weakness in the European PV market has led to a very challenging environment for the global PV industry. The impact has moved upstream and hit the equipment segment. Data collected through the Worldwide PV Equipment Market Statistics Program underscored this industry trend.

Worldwide PV Equipment Billings and Bookings Growth

Though overall bookings declined for the quarter, other data points showed that upstream Poly/Ingot/Wafer segment was the only segment experienced impressive growth in bookings during Q2’11, indicating continued strong capacity growth in this area.

Asia has been the center of capacity expansion, led by China, and this trend will continue as 66% of the Q2’11 bookings were from China.  U.S. and European companies have held dominant position in China’s PV equipment market, and for many of these Western equipment suppliers, China has become the most critical market for their products. In the past few years, China’s domestic suppliers have been gaining foothold in this market slowly but steadily, and they have demonstrated some impressive growth in market share, achieving a status that they have not been able to obtain in the semiconductor and FPD equipment markets. China domestic equipment suppliers are now able to meet most PV manufacturing needs. Multi wire saw and fully automated screen printing equipment is still entirely relying on imports, but a number of Chinese companies are in various stage of developing their own product offerings.

PV Equipment Revenue
China Domestic Suppliers

Data estimated by CEPEA and SEMI (C-Si Technology Only)

 According to China Electronic Production Equipment Industry Association (CEPEA), revenue from PV manufacturing equipment sales of CEPEA member companies has grown from RMB 1.9 billion in 2008 to RMB 3 billion in 2010. The revenue reached RMB 3.1 billion during 1H’11, up 130% from 1H’10 revenue of RMB 1.334 billion. CEPEA only reports data for PV equipment based on c-Si technology. Out of the total RMB 3.1 billion 1H’11 revenue, RMB 1.9 billion came from poly/ingot manufacturing equipment, and RMB 1.2 billion from cell/module equipment. 48 Institute, JYT Corporation, and Zhejing Jingsheng M&E Co. were the top three suppliers, representing 61% of the total 1H’11 revenue. Majority of revenue came from domestic sales. CEPEA member companies recorded RMB 113 million in PV equipment export during 1H’11, representing only about 4% of total revenue. Plasma etching equipment and diffusion furnaces were the most popular among the exported equipment.

China Domestic PV Equipment Suppliers Revenue

Source: CEPEA and SEMI

* C-Si value chain equipment only

** Market Share calculation is based on CEPEA data and billings data from Worldwide PV Equipment Market Statistics Report

China-made equipment is offered at much lower prices compared with those of European and U.S. companies, and Chinese companies’ effort in improving product quality to enhance cost-performance ratio has also been paid off. Proximity to customers is another advantage. Many domestic equipment suppliers have been working closely with China’s PV manufacturers to provide customized solutions.

Currently China has about one hundred companies (including those in R&D stage) making PV manufacturing equipment. CEPEA estimates that China’s domestic PV equipment revenue will reach RMB 6 billion this year, double the revenue of 2010. In its 12^th Five-Year Plan, China government set a goal of creating 3-4 PV equipment companies, each with over RMB 10 billion annual sales by 2015. The goal is to collectively gain more market share and become less dependent on imports.

Last week, Solarworld USA led a number of U.S. PV companies filed a petition for an investigation into the alleged unfair trade practices of Chinese PV companies. As a global association with members from every key manufacturing region, SEMI has always been a strong advocate of open markets that are based on fair trade principals. SEMI believes that the long-term growth and a sustainable and profitable global PV industry depends on a strong global supply chain and a sound understanding of the ever changing global marketplace

About the Worldwide PV Equipment Market Statistics Program

The Worldwide PV Equipment Market Statistics Program is jointly administered by SEMI and the German Engineering Federation (VDMA). Billings and bookings data is gathered from about 50 global equipment companies that provide data on a quarterly basis. To learn more about this program and the report, please visit http://www.semi.org/en/node/38716