According to EnergyTrend, Taiwan-based solar cell makers' capacity utilization has dropped recently because of countervailing duty (CVD) and anti-dumping duty (AD) issues. However, it is rumored that some makers plan to expand their module capacity. Arthur Hsu, research manager at EnergyTrend, described this situation as a reaction to US Department of Commerce's (DOC) preliminary ruling in CVD, which may be viewed as potentially beneficial to Taiwan makers because the costs of China PV module exports to the US will likely increase. This means Taiwan makers could see transferred orders, and hence plan for capacity expansion.
Taiwan's module capacity is more than 1GW every year. If the US, EU and other countries impose high tariffs on China makers in the future, Taiwan-made modules could be more competitive with costs closer to China modules. However, China makers are evaluating the possibility of building manufacturing facilities in so-called "third party countries" like Mexico, Eastern Europe and India, where they can offer products at lower costs. As long as the final CVD and AD rulings are worse than China makers' expectations, they would transfer their capacity to "third party countries" and start mass production in about one quarter.
"On the other hand, if the rulings impose minimum price and volume quotas similar to the EU's ruling, Taiwan makers may suffer from module capacity expansion," said Hsu. "Under such a scenario, China makers can retain their competitiveness and market share by outsourcing to meet US market demand beyond the limited volume."
Hsu added that the current global module capacity is around 63.2GW. Although there is still room for Taiwan module manufacturers to implement some strategic arrangement, they need to tread carefully when it comes to module capacity expansion. It is necessary to consider global module capacity, high subsidies from the China government as well as product differentiation strategies when making such a move, EnergyTrend added.
