Some solar makers believe the merger between Neo Solar Power (NSP) and DelSolar, a subsidiary of Delta Electronics, will not affect the industry significantly. Nevertheless, this will set a good example for the industry to increase the speed of consolidation.
NSP and Delta Electronics announced cooperation on November 19, 2012. NSP will acquire DelSolar in two phases, with NSP remaining as the existing company. The acquisition will increase NSP's total solar cell capacity to 2GW, and module capacity to 240MW. In addition, NSP has been investing in system development, and with Delta's PV inverter the new firm will have a comprehensive downstream sector. At a press conference, NSP stated that after the merger and integration, Delta will become NSP's biggest shareholder.
Most solar makers are optimistic about the merger as it is likely to become a trend due to the current market condition. Right now, is seen as the best time for Taiwan-based makers to make a presence in the global market as trade wars between the US, EU and China will likely curb China-based solar firms' exports.
One of the risks of the merger will be the increase of capacity. NSP's current capacity utilization rate is around 70% while DelSolar has been facing a capacity utilization rate of below 50%.
On the other hand, with financial support from Delta, the new firm will have a relatively strong financial position.
Compared to the other top two players in Taiwan, Motech and Gintech, each having a capacity of around 1.5GW, the new firm's total capacity is quite close. This means the merger will not cause significant fluctuations within the industry.
