Utilization rate increases in 1Q13, PV industry accelerates concentration

Trendforce indicated in its "Gold Member Report" that although global grid-connected installations in 2013 may not increase significantly compared to the amount of 2012.

EnergyTrend, a research division of Trendforce, indicated in its "Gold Member Report" that although global grid-connected installations in 2013 may not increase significantly compared to the amount of 2012, the actual demands of China, Japan, US, India, and other emerging countries would increase. In 2013, global demands for modules will exceed 30GW (approximately 32-34GW, a 7% yoy increase). Due to the increased demands and reduced supply, the PV spot price and utilization rate is expected to rise.

EnergyTrend indicated that the utilization rate of each segment of the PV supply chain will increase in 2013 due to the following reasons.

1. Increased demands, reduced supply
Demand in the module market is expected to increase in 2013; though the amount of grid-connected installation remains still, the actual demand would be around 32GW-34GW. Therefore, the demands of each segment will increase, and since supply is not increasing, the utilization rate will rise.

2. Clearer boundary between brands and OEMs
In the current market, first-tier manufacturers are not eager to enhance capacity and second-tier manufacturers may receive OEM orders from first-tier manufacturers, thus most of the manufacturers that meet market requirements would be able to effectively increase the utilization rate.

3. Uncompetitive manufacturers phased out
Due to the policies that regulate modules and the rise of self-consumption systems, manufacturers that lack technology to enhance cell efficiency may be phased out. On the other hand, if products were sold for a price under cost for a long time, new manufacturers and small manufacturers without cost advantage may also be eliminated.

In conclusion, the utilization rate of each manufacturer has increased in 1Q13. However, though manufacturers have all announced full production, due to limited labor , the capacity utilization rate could only be maintained at 60%-85%.

Moreover, according to EnergyTrend, cell production from the world's top ten cell manufacturers have all exceeded 1GW in 2012, accounting for approximately 40% of the overall capacity. Though market concentration is not as obvious as that of the wafer market, as soon as brands begin to cooperate with OEMs, more companies may transform into OEMs. In addition, module segment may also become more concentrated, and manufacturers with a large market share will be considered the most advantaged.

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