The merger of Taiwan-based solar firms Neo Solar Power (NSP) and DelSolar (a subsidiary of Delta Electronics) has been seen as beneficial and a necessary trend for the industry, as NSP gains strong financial support and Delta finds a way to reduce investment losses. Nevertheless, some firms believe the merger is a gamble as, under the current market conditions, having the largest capacity will mean the merged firm needs to find strong distribution channels.
Solar makers added that DelSolar failed to be listed on the stock market like firms such as Motech and E-Ton Solar when market conditions were healthy. Over the recent years, market fluctuations have caused DelSolar to suffer relatively significant net losses.
For Delta, DelSolar has been one of its subsidiaries yet to show strong revenue growth. With the unstable solar market, merging with NSP is one way to control investment losses. Furthermore, NSP management will dominate the new firm, which means DelSolar's management will likely be phased out.
Solar makers added that for NSP, the merger solves the problem of not having strong financial support.
Under the current market conditions, the firms that can survive the longest will win. Firms without strong financial support are likely to suffer from liquidity problems.
Currently, major Taiwan-based solar firms all have strong shareholders. Motech has Taiwan Semiconductor Manufacturing Company (TSMC), NSP has Delta, Solartech and Sino-American Silicon have HTC chairwoman, Cher Wang, Green Energy Technology (GET) has Tatung, and E-Ton Solar has Inventec.
