Quincy Lin, chairman of Taiwan-based solar cell maker Neo Solar Power (NSP), has noted that administrative, procurement, and R&D costs can be lowered through merging with DelSolar.
According to Lin, currently solar cells and modules are both commodities and costs are the key for success. The recently announced merger could reduce administrative costs because sales, marketing, and procurement teams will be combined. and as the firm's size increases, the procurement team will have more negotiating power when buying materials, said Lin. In addition, the combined capacity of the two firms is 2GW, and R&D costs can be shared among the firms, reducing costs by nearly 50%, added Lin.
DelSolar has 70% of its cell and 60% of its module capacity in China while NSP has all its capacity in Taiwan. After the merger, NSP will have a solar cell capacity of 1.64GW in Taiwan and 440MW in China. The new firm's module capacity in Taiwan will be 130MW. Lin noted that in the future, orders from Europe and the US will be supplied by Taiwan, and non-EU and non-US customers will be supplied from China.
Lin added that NSP has been discussing this matter with DelSolar's parent company, Delta Electronics, for six months. NSP will oversee the new firm, but this does not mean that Delta will exit the solar market. In fact, Delta has agreed to not sell NSP shares for three and a half years.
Lin hopes to incorporate DelSolar's management team.
