According to China-based media reports, during boom times from 2010-2011, the number of firms in major solar segments (wafer, cell, and module) increased from 807 to 901, an increase of 11.65% on year. Due to the trade war and oversupply in the market, the number of firms decreased from 901 in 2011 to 704 in 2012, an on-year drop of 21.85%.
As for the module segment, which accounts for 70% of the firms in China's solar supply chain, there were 624 firms in 2011, and the number decreased to 454 firms in 2012, an on-year decrease of 27.24%, according to the reports. In particular, around 180 firms have halted production though they have not yet exited the market. As for polysilicon, more than 85% of the firms have suspended production since 2011.
Solar makers pointed out that most firms in China's supply chain have been hit by net losses. This means even though they manage to survive, they do not have funds to acquire peers. The industry-wide financial woes also have been deterring investors from entering the market. Hence, due to shortage of funds, small- and medium-size solar firms were forced to exit the market.
