LONGi (601012-CN), the leader in solar silicon wafers, announced that it will reduce the price of silicon wafers of various sizes by about 7-10%. This is a rare substantial price cut since May 2020. The market is optimistic, and the cost pressure of Taiwan module manufacturers will Slow down, joint regeneration (3576-TW), Motoaki (6443-TW), Motech (6244-TW) Waiting for profit will be significantly optimized in the fourth quarter at the fastest.
Next year, with the opening of new production capacity of upstream raw materials in China, the cost will be further reduced, which will further promote the demand for downstream grid-connected installation, and the shipment of module manufacturers will also grow, and the industry will return to a healthy cycle.
Since the beginning of this year, solar module factories have been affected by the strong increase in the prices of upstream raw materials including polysilicon, silicon wafers, and batteries. The inability to respond to the cost of raw materials in real time has resulted in the reduction of profit margins for various businesses, including United Regeneration and Yuanjing in the first three quarters. Showing losses, Motech and Anji (6477-TW) Profits have also shrunk significantly.
Furthermore, due to the high cost of construction this year, the owners of various power stations have slowed down the pace of construction in order to avoid the erosion of their own IRR (internal rate of return). The pulling force on module factories is not stronger than in previous years, affecting module factories. Utilization rate.
However, with the continuous release of new silicon wafer production capacity in China and the unwillingness of local industry players to accumulate high-priced inventories, LONGi rarely voluntarily lowered prices in December, which was the first time in more than a year. For the leading companies, the new prices announced every month are even more of an industry trend. As leading manufacturers take the lead in lowering them, other second-tier players are bound to follow suit.
Motech’s general manager Ye Zhengxian is optimistic that prices can now be negotiated with silicon wafer manufacturers. The current status of the industry has changed from the previous “seller’s market to a buyer’s market.” The price of silicon wafers will also reach its peak in the fourth quarter of this year. It will continue to decline at the end of the year and next year, which will help module factories turn their shipments smoothly and promote the healthy development of the industry.
In addition, the current trend of major manufacturers to join RE100 is established. Taiwan’s solar installations are only increasing. According to the government’s goal of reaching 11GW next year, the new solar installations next year will be at least 3GW, which will double this year’s. The factories are actively expanding their factories to grab the huge demand next year.