The huge duties slapped onto China-made solar cells by the US Department of Commerce have been causing different effects in different economies.
Some in the US solar market welcomes the duties and see them as a way to curb China-based solar firm's expansion in the US market.SolarWorld's US office believes the duties will put the company back on track to play on the same level.Some opposing voices indicated that by slapping tariffs on China-made solar cells will only increase the total cost of a solar PV system in the US.This does not help the planet.A May 26 article in The Economist described the US tariffs on China-made solar panels as"dangerous and pointless."
China-based solar firms such as Yingli,Suntech,LDK,and Trina Solar have responded to the US move.Suntech,the number one solar module maker in the world,attributed shrinking first-quarter 2012 gross margins to the duties they had to pay to the US customs.LDK emphasized the importance of the US solar market and will continue with developments.
The most interesting part is the role of Taiwan-based solar cell makers.Some believe that Taiwan-based solar cell makers will benefit from the ruling since it is in the best interest of China-based solar firms to procure solar cells from other locations.Taiwan's solar cell supply chain has been one of the best in the world and with close proximity and no language barrier,Taiwan solar cell firms seem like the perfect choice for China-based peers to cooperate with.During a speech at the Global MBA Forum Series at National Taiwan University(NTU),PH Chang,president and CEO of Taiwan-based solar cell firm Motech,noted that the firm has been benefitting from increasing orders from China.However,Chang added,the prices of these orders have been less satisfactory.There are three types of operations for solar cell makers,said Chang,and they are tolling,exchange and conventional.Tolling and exchange operations are similar to OEM or EMS type of businesses.Motech has been keeping the percentage of tolling and exchange businesses below 20%.
In fact,Taiwan-based solar cell makers have reported on-quarter increases of revenues in 2012.Some believe this is due to increasing orders from China-based solar firms.Others believe this increase was due to urgent demand before Germany's April 1 incentive cuts.Nevertheless,Chang pointed out that China-based solar firms have some advantages that Taiwan-based solar firms do not enjoy,such as relatively cheap electricity bills.
Taiwan-based solar cell makers may be engaged in a dangerous game with China-based peers.Before the US investigation,cross-strait cooperation did exist but most of the time,the two supply chains were rivals.The frenemies relationship has existed for quite some time.If China-based solar firms continue to increase the amount of orders issued to Taiwan-based solar cell makers,the latter will continue to increase dependence on the former.Heavier dependence may hurt Taiwan's solar supply chain in the long-run.
If Europe and India also initiate similar investigations against China-based solar firms,Taiwan's solar cell makers may finally be able to increase prices of solar cells.But this may be the final push for China-based solar firms to increase(dump)orders and swallow all capacity of Taiwan's solar cell production.If that happens,Taiwan's solar supply chain will become merely a solar cell factory for China-based peers.
