Solar supply stabilization reduces pressure on ASP declines in 2013,says Solarbuzz Press release;Jackie Chang,DIGITIMES[Tuesday 25 September 2012]Solar module manufacturers that survive through 2013 are set for strong market-share gains,as global trade barriers and increased corporate casualties combine to decrease the competitive landscape significantly,according NDP Solarbuzz.
Michael Barker,analyst at NDP Solarbuzz,said,"The increasing globalization of solar demand continues to soften quarterly demand swings.This will soon allow production and shipment forecasts to be planned with increased certainty.However,in the short-term,margins continue to be under pressure until the market rationalizes at an appropriate supply and demand balance."
Reduced 2012 guidance provides another sobering reality-check
During third-quarter 2012,leading solar module manufacturers were confronted by increasing inventory levels(from 66 days to 79 days outstanding)and declining shipments(down 7%on quarter).This has occurred because solar manufacturers have been boosting production levels in expectation of a traditional solar second-half boom in shipments.However,end-market demand during third-quarter 2012 has yet to support the higher production levels.
First-half 2012 global demand was approximately 13GW,while second-half 2012 demand is projected to reach 16GW,for only 25%growth.As a result,leading module manufacturers have been compelled to decrease guidance for full-year 2012 shipment growth,from 30%guided at the end of first-quarter 2012 to approximately half that level today.
"Although fourth-quarter 2012 will provide a significant boost in end-market demand,it is unlikely to match the record levels seen during 2011 when year-end demand resulted in over 10GW of solar modules being consumed in a single quarter,"added Barker.
Demand in fourth-quarter 2012 is now expected to be in the range of 8.5-9.5GW,and NPD Solarbuzz predicts the most likely demand forecast scenario for 2012 to fall just short of 30GW.An upside of 25%remains possible,but is strongly dependent on a late surge in shipments to China and India,in addition to a strong recovery across European markets.
Market share gains become a top priority for 2013
Signs are now emerging that 2013 will provide an opening for leading solar manufacturers to accomplish market-share gains.Supply rationalization will be an essential component of this,with leading module suppliers being able to increase production at the expense of legacy competitors.
This stabilization phase during 2013 will be characterized by increasing consolidation and liquidation of lower-tier solar manufacturers,many of whom have suspended production or are simply unburdening inventory today.
As supply and demand continue to stabilize,this will result in a slower on-quarter average selling price(ASP)decline and a lower risk of inventory build during 2013.This will allow upstream module manufacturers to maintain higher inventory levels as there will be less risk of any dramatic devaluation of stock-on-hand due to rapid end-market fluctuations.
Although attention has previously focused on the shakeout of Europe-and US-based solar manufacturers,the next set of exits from the solar industry will likely come from underperforming China-based tier two and three manufacturers.
