Here is an outlook on the global solar PV industry for 2012, done with the assistance of Dr. Henning Wicht, senior director and principal analyst, IHS iSuppli. First, the outlook for the global solar PV industry for 2012. According to Dr. Wicht, the bottom up analysis results for the global solar PV industry is at 22 GW. However there is upside potential, e.g., in Italy and China, of a total of 6 GW.
On the same vein, what is the outlook for solar cell production in 2012? He said that based on the 22 GW market, 19.6 GW of cSi cells will be produced in 2012. If the market is growing faster (upside potential), then 24 GW is possible.
Let us now have a look at the current top 15 producers. The graphs here are for global crystalline module producers and global thin film module producers, as of Q2 2011. The data for 2012 will certainly look different.
Fig. 1 is about the crystalline module producers, as of Q2-11, with Suntech the leader at 9.8 percent share. Yingli with 6.8 percent and LDK with 6.4 percent are the next two. The others are: Trina Solar 6.2 percent, Canadian Solar 5.2 percent, Sharp 4.6 percent, Jinko 3.7 percent, Hanwha Solar 3.6 percent, Jabil Circuit 3.5 percent, SolarWorld 3.3 percent, REC 3.2 percent, Sunpower and Kyocera with 2.8 percent each, Sanyo Electric 2.5 percent, Bosch Solar 2.4 percent and all of the others at 33.3 percent.
Fig. 2 is about the global thin film module producers, as of Q2 2011, with First Solar as
the leader at 45.5 percent share. Solar Frontier with 10.5 percent and Sharp with 5.6 percent are the next two. The others are pretty small at the moment, with some of the major ones being Q-Cells with 3 percent, Bosch Solar 1.7 percent, etc. Others constitute 15.5 percent.
Improve cost structure, diversify downstream!
Two years ago, iSuppli had advised: ” improve the cost structure, improve the sales side, and diversify downstream.” How true does these hold for 2012?
Dr. Wicht said: “This advice remains very valid. Since 2009, nearly all Western players have developed downstream activities. They are using the power plant business to outbalance week demand and to enter into emerging markets.
“The challenge is now at the Chinese players: How do you maintain the high utilization of factories when sales is not visibility and there is no downstream business? PV installations in China are used as a “fast exit”, generating module sales and maintaining utilization (e.g., Yingli).” Read more…
This is a continuation of my coverage of the fortunes of the global semiconductor industry. I would like to acknowledge and thank Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, who has provided me the latest numbers.
According to the WSTS’s HBR, June’s actual sales came in at $27.110 billion with the corresponding June 3MMA sales at $24.677 billion. It should be mentioned that the previous five months (January through May, respectively), experienced very slight upward sales revisions from last month’s published HBR, as highlighted in the table below:
The Cowan LRA model’s sales forecast estimates for June as determined (and shared) last month were $29.435 billion (actual) and $25.445 billion (3MMA), respectively. Thus, the model’s June MI (Momentum Indicator) came in at minus 7.9 percent. This indicates (mathematically speaking) that the semiconductor industry’s June actual sales was much lower than the model’s forecasted expectation by $2.325 billion and that, most probably, 2011′s sales growth will continue to trend downward for the rest of this year.
Plugging the latest actual June sales into the forecasting model yields the following updated sales and sales growth forecast estimates for 2011 and the first two quarters of 2012:
The key take-aways from comparing the latest versus previous month’s forecast results (from the above two tables) are highlighted here: Read more…
According to Stephen Su, general director of IEK (Industrial Economics & Knowledge Center), Taiwan, tablets are likely to transform the ICT industry. He was delivering a keynote at the Computex 2011 pre-show conference being held in the city’s well known Taipei World Trade Center (TWTC).
Tablets are now said to be moving from ‘experience’ to ‘industry.’ Tablets will provide more innovative user-interface experiences as well. More cost will be spent on the user interface on tablets, as far as BoM is concerned, he added.
Further, tablets are likely to change the transactional model of the ICT industry, and will emerge as the new ‘service platform’ for the integration of ICT and the other industries as well.
In this scenario, Taiwan is now well poised to once more play a leading role among mobile devices. The country not only has leading mobile device manufacturing capabilities, it can also supply most of the required electronic components, said Su.
The next step will be to strengthen the technology of key components, terminal design, application platform and service innovation. In future, Taiwan could go on to become te leading development and innovation center in the world, he added.
Earlier, he said that there was a cross-over evolution among mobile devices. In smartphone usage, messaging and apps had overtaken voice. As for non-voice usage, heavy media content was currently being accessed regularly on the Apple iPad than the iPhone.
The iPad users are said to be spending more time with media content other devices. The users’ response has shown that the iPad truly affects the usage of other devices, besides smartphones. Smartphones will soon impact the growth of mobile phones, PMPs and PNDs. However, the tablet will mostly affect the netbook and e-reader, while gradually impacting the notebook, Su noted.
Consequently, there has been a transition in the mobile device industry — from product to the ecosystem. More companies are now creating their own ecosystems, such as Apple, RIM (Blackberry), Nokia Ovi, Samsung, etc.
Three types of smartphone platforms — closed, hybrid and open – are shaping up for the ecosystem based competition. Innovative applications are said to be leading the development of key components.
Mobile devices are now focusing more on the experience, than on the product. Cloud services are being offered around the clock for experience offering.
As a result, tablets are likely to transform the ICT industry, noted Su, as it is now moving from ‘experience’ to ‘industry.’
“The electronics industry in India, touching $60 billion, has now thrown up a challenge,” said Dr. N. Seshagiri, former director-general, National Informatics Centre (NIC), chief guest at the 6th ISA Vision Summit, which kicked off today in Bangalore. “This decade can see many disruptions. One innovation likely to catch all of us unaware is nanotech!”
According to Dr. Seshagiri, nanotech devices have been valued at $1.6 trillion by 2013. Electronics, especially nano-electronics is yet another opportunity to energize the Indian economy in this and the next decade.”
He added that India isn’t lagging behind as about 30 Indian companies had exported goods worth a few billion dollars. Nanotech isn’t far away, as there can’t be a better enabler than microtech and nanotech. The entry cost to nanotech is relatively low. One can find companies from China and India emerging.
What should India do with electronics hardware and IT? We don’t expect the Indian software industry to be interested in nanotech. We need to start learning new electronics from now on.
More and more R&D should now come to India and China. Our patent laws are neither bad nor good. There is now a need to work out a win-win situation. To make that happen, the Indian government’s patent policies need to change.
Dr. Seshagiri added: “We must build awareness among the Indian ESDM companies and also within the government. The ISA would do well to bring the Indian government into its shelter.”
Dr, Ajay Kumar, joint secretary, Department of IT, Government of India, said that the ISA Vison Summit 2011 focuses on a very relevant theme. While India is fairly well known in software, it lacks in electronics system and manufacturing. As per the task force in 2009, demand for electronic systems is projected to grow from $45 billion to $400 billion. At the current rate, approxiately $104 million can be manufactured here and the rest has to be taken care of by imports. He added: “Electronic system design and manufacturing can propel the industry toward energy efficiency. The time has come to show India’s might.” Read more…
For those interested, since its debut in 2009, this show has been split into two sections – productronica India — devoted to production technologies, SMT and EMS/contract manufacturers, PCB, solar and PV, laser, etc., and electronica India – focused on components, semiconductors, assemblies, LEDs and materials.This year, there are going to be three added attractions or special exhibit areas, namely:
* Solar pavilion.
* LED pavilion.
* Laser pavilion.
Solar PV main attraction
A report on the ‘Solar PV Industry 2010: Contemporary Scenario and Emerging Trends’ released by the India Semiconductor Association (ISA) with the support of the Office of the Principal Scientific Advisor (PSA), lays out the strengths and challenges of the Indian solar PV market:
* Even though the industry operates at a smaller scale as compared to other solar PV producing nations, production in India is very cost effective as compared to global standards.
* With Government initiatives such as the SIPS scheme and JN-NSM in place to promote application of solar PV in domestic market, the Indian solar PV industry is likely to gain further edge over other solar PV producing nations.
* There is no manufacturing base in India for the basic raw material, that is, silicon wafers.
* Over the last five years, China has emerged as the largest producer of solar cells in the world. The country currently has about 2,500 MW of production capacity for solar PV as compared to India’s 400 MW. Taiwan, with annual capacity of 800 MW, is also emerging as a major threat to the Indian industry.
* Price reduction is another major challenge for the industry as this would have greatly impact the future growth of the market.
The recently concluded Solarcon India 2010 threw up several interesting points as well. Industry observers agreed that the timely implementation of phase 1 of the historic Jawaharlal Nehru National Solar Mission (JN-NSM) is going to be critical for the success of this Mission.
The MNRE stressed on the need to develop an indigenous solar PV manufacturing capacity in solar, and build a service infrastructure. Strong emphasis is also being placed on R&D, and quite rightly. Notably, the Indian government is working toward tackling issues involved with project financing as well.
All the right steps and noises are currently being taken and made in the Indian solar PV industry. If these weren’t enough, the TÜV Rheinland recently opened South Asia’s largest PV testing lab in Bangalore!
This year, an exhibitor forum on PV and solar will also take place at the Solar PV pavilion during electronica India 2010 and productronica India 2010.
K. Subramanya, CEO, Tata-BP Solar will be the chairman of STFI, while Hemant Revankar, managing director, Bipin Engineers will be the vice-chairman. Jaideep Malaviya, an industry veteran with two decades of experience will steer the federation as its full time president. Senior executives of major players in the industry will play an active role in STFI in various capacities.
I simply could not believe my eyes! How can an industry body, which is being formed today, come up with such a grand statement? Something has to be wrong somewhere. Is it a case of misreporting or perhaps, using a headline that’ll get more eyeballs? I really don’t know!
Here are three references that I found on the Internet. These are all very prestigious portals.
Now, I have had the pleasure of meeting K. Subramanya, CEO, Tata-BP Solar. I got into a conversation with him, seeking clarification on how the government of India will be missing the NSM target!
Here’s what K. Subramanya said: “It is a wrong inference by the press. And I had no contribution on this. There was a slide shown on the dias, an extract from an MNRE website. But there was no issue at all! It is simply a bad and negative pick up and attitude of press in India. Missing the moment and spirit of the occasion. A sad commentary.”
I asked him what steps can be taken by STFI to promote solar thermal products such as solar water heaters and cookers in the country. He added that it would include some suggestions as well as awareness building, bank finance, promotion and publicity by the manufacturers.
According to the release, players in India who control over 75 percent of the market have come together to float the STFI to expand solar water heating usage, and promote applications beyond that as well. Subramanya said that as of now, solar water heating is the only subject in focus.
On the subject of STFI working on setting up a talent pool in the country, he said that members would be deliberating among themselves to take this forward.
I hope to have further discussions with STFI on its agenda sometime later. In the meantime, congrats and welcome to this industry body.
Recently,Jérémie Bouchaud – Director and Principal Analyst, MEMS, iSuppli, ran a program on High-margin MEMS: Medical, Industrial and Aerospace.
According to Bouchaud, the MEMS market is not immune to the downturn and is down 8 percent in 2009. The bottom was hit in Q1-09. However, the MEMS segment is likely to see strong recovery and regain double digit growth in 2010.
The high end markets enjoy similar growth as consumer and mobile MEMS markets. It has grown at 16 percent CAGR from 2008-2013. There are opportunities for small companies and foundries. Volume manufacturers have also come to high end markets.
Overview for high-margin MEMS
Providing a market and suppliers overview for high margin MEMS from 2008-13, he said: “We don’t believe MEMS market is immune to the current market conditions. It went down 5 percent in 2008 and 8 percent in 2009. The last quarter of 2008 was very bad.
Not only automotive applications are suffering, the entire industry is suffering. Only a few segments in consumer electronics and cell phones, etc., are doing better. However, going 2010 onward, MEMS industry will see +11.5 percent growth from 2009-2013.
Coming to MEMS market by applications, mobile and CE are driving growth. They are not going down in 2009, but slightly growing by 4-5 percent. Most of the other applications are going down, however. Areas such as military and civil aerospavce, medical electronics, industry and process control, are interesting.
High margin MEMS is growing as fast as CE and mobile MEMS — 16 percent CAGR from 2008-2013. Industry and process control will be biggest part of the market by 2013. Also, medical electronics and military and civil aerospace should do well, added Bouchaud.
This market should be more stable than what it is presently. MEMS wafer probe cards, e.g., is extremely dependent on the memory market, which has been going up and down. Demand for memory has been bad in 2008 and 2009.
He also presented a brief overview of the top suppliers for high margin MEMS — such as Formfactor, Honeywell, GE Sensing, FLIR Systems, Epson, DRS, JDSU, BAE Systems, MEAS and Panasonic.
Formfactor is the leading manufacturer, especially in wafer probes. Honeywell is a significant player, strong in accelerometers, gyroscopes for aerospace and defense applications. GE Sensing is a leader for pressure sensors for medical applications. FLIR Systems is a leader in microbolometers for industrial and defence application. Epson is a leader for professional inkjet applications. Panasonic is a key player in pressure sensors, accelerometers, etc. JDSU is a purely fabless optical MEMS company. MEAS has a number of products — accelerometers, vibration sensors, flow sensors, etc.
Bouchaud also discussed the leading MEMS foundries for higher MEMS, where iSuppli calculated the revenue for high margin MEMS products only. These include companies such as Microalyne, Silex, IMT, Tronics, GE Sensing, Coilbrys, Menscap, Dalsa, Honeywell, Semefab, Microfab Bremen, X-Fab, MEAS and APM.
This is a very diverse picture, he said. “We have pure play foundries — purely focused on high end MEMS markets, such as Micralyne, IMT, Tronics.” Another group is covering both high end and volume markets such as consumer and automotive — like Silex, Dalsa, APM, etc. Then, there are those with mixed models, which are IDMs, such as GE Sensing, Colibrys, Memscap, Honeywell, etc.
If all of the industry analysts are to be believed, the semiconductor market recovery has begun! Nearly all of them have been forecasting a recovery in the global semiconductor market as well. Let’s take a look at their predictions.
* According to IC Insights, the top 20 suppliers’ sales show back-to-back 19 percent growth rates! In fact, four of the top 20 — Samsung, Toshiba, Qualcomm, and MediaTek are likely to show sales growth this year!
* As per Databeans, the Americas was the first to post growth for semiconductors from the same quarter a year ago, up 8 percent. Worldwide, Q3 came in down 10 percent from 2008, but up 20 percent sequentially. This puts the market on target with our current prediction of $217 billion, a contraction of 13 percent from 2008. Databeans is also still predicting that the 2010 revenue will be up 17 percent from this year.
* The Semiconductor Industry Association (SIA) is projecting worldwide sales of $219.7 billion for 2009, a decline of 11.6 percent from the $248.6 billion reported in 2008. Forecast projects that sales will grow by 10.2 percent to $242.1 billion in 2010 and by 8.4 percent to $262.3 billion in 2011. Worldwide sales of semiconductors in the quarter ended September 30 were $61.9 billion, an increase of 19.7 percent from the prior quarter when sales were $51.7 billion, it reported.
* According to DRAMeXchange, 3Q09 DRAM revenue increased 40.7 percent to $5,719 million. Samsung, Hynix, Elpida, Micron and Nanya (of Taiwan) make up the top 5 positions.
* Worldwide silicon wafer area shipments increased significantly during the third quarter 2009 when compared to the second quarter 2009 area shipments according to the SEMI Silicon Manufacturers Group (SMG) in its quarterly analysis of the silicon wafer industry. Total silicon wafer area shipments were 1,972 million square inches during the most recent quarter, a 17 percent increase from the 1,686 million square inches shipped during the previous quarter. The new quarterly total area shipments are 13 percent below third quarter 2008 shipments.
* Malcolm Penn, chairman and CEO of Future Horizons says that Q3-09 chip growth has set the stage for 22 percent surge In 2010 vs. 2009! The market rebound started at the end of Q1, with Q2 coming in at 17 percent sequential growth. With Q3 now up a further 20 percent and Q4 market guidance in the 5 percent to 7 percent range, the 2009 market is set to close out at between $220-225 billion.
* Although global semiconductor revenue is set to decline in 2009 for the second consecutive year, quarterly year-over-year growth is expected to finally return to the market in the fourth quarter, signaling the start of the industry recovery, according to iSuppli Corp. As iSuppli previously announced, global semiconductor revenue is set to contract by 16.5 percent in 2009.
* A note of caution from The Information Network, which said that semiconductor equipment billings were at 1994 levels as semis continue to underspend! Much of the problem in its opinion is the transition from 200mm to 300mm diameter wafers. Also, semiconductor companies, let by International Sematech, are pushing for a transition to 450mm wafers, which in our opinion will be the death knell for a large number of equipment manufacturers. It is critical that semiconductor equipment manufacturers boycott 450mm development. The Information Network also indicated that the “salad days” are over for the equipment industry.
* Late September 2009, the EDA Consortium (EDAC) Market Statistics Service (MSS) announced that the EDA industry revenue for Q2 2009 is $1,125.5 million, a 5.6 percent sequential decline from Q1. Since Q3 results are awaited, and as Walden Rhines, EDAC chair and chairman and CEO of Mentor Graphics, said, “As the electronics industry recovers, and its R&D spending increases to come in line with its growing revenue, the EDA industry would be expected to recover as well.”
* According to iSuppli, foundries played the semiconductor survivor in 2010. It reported that although the global semiconductor foundry market is set to make a welcome return to growth in 2010 after a terrible 2009, the recent downturn is likely to thin the ranks of the top-tier pure-play suppliers down to just three major players in the future,
There you have it! All of the semiconductor pundits are pointing toward a recovery in 2010!
However, there are some questions that remain unanswered, for now. iSuppli also reported that there has been no double booking in this semiconductor recovery in late 2009 at least. Will this scenario remain? For how long? Or, will those same old mistakes be made once the industry is back to being healthy?
Will there be renewed interest in the move toward 450mm fabs? What happens to all those companies making equipment for 300mm fabs, should that happen?
Will the companies re-write their business plans, as advised by Future Horizons’ Malcolm Penn?
In all of these good tidings, there is some discomfort hidden deep down!
Oh, one last point! What happens to all of those folks who got laid off during the longest recession of our times? Will they be re-instated?
Thanks to Jon Cassell and Debra Jaramilla, I was able to get in a conversation with Stefan de Haan, senior analyst, iSuppli Corp., regarding the global solar PV industry. Recently, iSuppli had provided guidance on how “Half of all solar panels made this year won’t be installed in 2009!”
Correcting solar cell manufacturing oversupply
Previously committed capacity expansions have caused solar cell manufacturing oversupply. Why and how can this be corrected?
According to Stefan de Hann, the cell suppliers are already reacting, i.e., cutting back on production and delaying expansion plans. Nevertheless, a consolidation will take place, since prices won’t recover. Production cost is the key to be among the survivors. However, 2009 will see the peak of the cell/module oversupply. From 2010 on, the situation will ease slowly.
If that were the case, weren’t the companies doing enough to check all of this during the downturn of Q4-08?
de Haan added that at the end of last year (record year 2008!), everybody still expected continuous strong demand. “It took most companies longer to realize that their enormous growth expectations were not realistic. We were the first to predict the current scenario already in summer 2008, but the nearly all the companies I talked to at the PVSEC in September 2008 didn’t share this view at all.”
So, therefore, they probably weren’t checking their market carefully enough, after all!
Failure of a-Si thin film solar cell makers?
Is all of this setting the stage for the failure of multiple cell manufacturers, particularly those pursuing a-Si thin film solar cells?
According to the iSuppli analyst, those suppliers relying on standard a-Si thin film lines [AMAT/Oerlikon] will definitely face problems for several quarters. “Collapsing polysilicon prices incease the pressure on these manufacturers. There will be not only excess crystalline cell production, but also excess a-Si production,” he added.
There is also a huge amount of solar cell manufacturing capacity in crystalline silicon solar cell, rather than thin film. When will this start changing and why?
de Haan advised that both crystalline and thin film production (and installation) will continue to grow for the next years. Due to lower production costs, thin film will increase its market share gradually. In iSuppli’s current projection, it sees a thin film market share of 35-40 percent in 2013, up from 15 percent in 2008.
Lessons for India?
With consolidation likely to happen in the global solar cell manufacturing industry to control or combat oversupply, where would it all leave the the talk of building new capacity in India? As we know, back home in India, various companies are betting big on this sector.
In this regard, what are the lessons to learn for the Indian solar PV industry? Bear in mind that India is a “wild card” as far as solar demand is concerned.
According to de Haan, Companies hope for huge investments in the coming years and want to be prepared. However, in the current oversupply situation, the comparatively new Indian cell and module manufacturers will suffer from dropping prices.
He advised: “For them it is important to stay flexible with regard to polysilicon and wafer purchase. These prices won’t recover either, no need for long-term commitments. Most importantly, they need to develop their domestic market. If I was an Indian module manufacturer, I would integrate downstream and enter the installation business.”