Balance in solar market to return in 2014-2015,says SAS chairman Nuying Huang,Taipei;Jackie Chang,DIGITIMES[Thursday 21 June 2012]MK Lu,chairman of Taiwan-based Sino-American Silicon(SAS),believes continuous upgrades to R&D skills are a must for solar firms as market balance is likely to occur in 2014-2015.Firms need to control cash flow carefully and not try to boost sales and capacity utilization rates knowing losses will be incurred,said Lu.
SAS,Solartech,Sunrise and Sunshine PV recently held a joint press conference to exhibit their latest technologies.
Lu noted that the solar market has been eliminating unhealthy firms for five consecutive quarters since second-quarter 2011.This is likely to continue until the market finds balance in 2014-2015.During this time,the unhealthy firms will exit the market while the healthy firms gain more strength to expand capacity when the market reaches balance.
Most China-based vertically integrated firms have been a part of too many segments,and hence have been suffering more during the market downturn than Taiwan-based peers,claimed Lu.Rapid expansions by China-based firms were not accommodated by sufficient workers,hence firms are just beginning to realize their inefficient use of financial capital.Some firms have been facing financial troubles,said Lu.
Taiwan-based firms,on the other hand,are smaller in size and have not been able to expand capacity as quickly as their China-based counterparts.This causes Taiwan-based firms to be extra careful about spending.Losses have been shrinking due to returning orders and increasing capacity utilization rates,added Lu.
Lu believes it is the right thing to do for traditional utility and fossil fuel firms to add solar to their business plans.
SAS has been focusing on technological improvements,not on sales volume or capacity utilization growth.Lu pointed out that the firm is waiting for the market to reach a balance to make acquisitions to expand capacity,hence effective control of cash flow is a must.
Despite continuous losses in the solar business,SAS has been making profits in other businesses such as semiconductor wafers.Furthermore,performance from LED sapphire substrates in the third quarter is expected to exceed the second quarter,especially for patterned sapphire substrates(PSS).
MK Lu,chairman of SAS,emphasizes the importance of effective cash flow controlsPhoto:Michael Lee,Digitimes,June 2012
