PV mfg strategy focused on cost cutting

The SEMI PV Group has recently released its quarterly Worldwide PV Equipment report for the quarter ending December 31, 2011. According to the industry association, global photovoltaic (PV) manufacturing equipment book-to-bill ratio was 0.53, up from last quarter's record low of 0.35. A more modest decline in bookings than billings resulted in the increased ratio. However, the ratio was still lower than any quarter in 2010 or 1H11, the report indicated.

Capacity expansions by PV manufacturers in the past two years have caused manufacturing capacity to significantly exceed demand. A combination of uncertain market demand and overcapacity has led to drastic cuts in capital spending by PV manufacturers. However, as reported by NPD Solarbuzz, "equipment spending by Tier 1 PV manufacturers is poised to resume in 2013 with strong double-digit annual growth rates forecast out to 2016. Their outlook is that "...the CapEx downturn is forecast to finally bottom-out during 2Q12, following six consecutive quarters of negative growth."

IMS Research has reported that manufacturers are looking for ways to cut costs and adapt their manufacturing strategies and improve their cost structures in order to remain competitive. "Throughout 2010 and 2011, many suppliers had quickly expanded their in-house wafer capacities. However, as wafer prices have fallen by over $0.70/W to record lows, suppliers are now reducing their in-house manufacturing and purchasing more wafers from third-party suppliers."

As we move through 2012, PV manufacturers will focus on reducing costs, increasing product efficiencies and moving into new markets in order to diversify and mitigate risks. The recently released third edition of the International Technology Roadmap for Photovoltaics (ITRPV) confirms the ongoing opportunities for cost reduction in c-Si solar. Participating companies from around the world are working toward the goal of making PV more competitive and ensuring technological progress. The current industry downturn is not lessening the need for more effective collaboration and cooperation in solar cost down efforts.

- Bettina Weiss
??SEMI PV Group