Japan-based Kaneka, a solar firm that produces N-type mono-crystalline solar cell using heterojunction with intrinsic thin layer (HIT) technology, has reportedly been discussing cooperation with Taiwan-based firms such as Gintech and Neo Solar Power (NSP).
The former hopes to transfer technology to Taiwan-based firms for mass production. Executives from Gintech and NSP have confirmed having discussions with Kaneka.
Kaneka has reportedly been contacting Taiwan-based firms since early as 2011. But Taiwan-based solar firms have been evaluating the possible risks of investing in mass production of HIT solar products.
Kaneka at the door
Kaneka and Belgium-based IMEC announced plans to jointly develop 6-inch HIT solar cell with above 20% efficiency using copper materials to replace silver materials at the end of 2011. Kaneka hopes to transfer the HIT technology to Taiwan-based firms for mass production and then promises to procure a certain amount of the products, according to solar makers that have been in contact with Kaneka.
Rising demand for N-type solar products
The current P-type mono- and multi-crystalline solar market has been experiencing oversupply causing the most competitive solar firms in China to report net losses.
Taiwan-based makers have yet to face bankruptcy risk but some small-size solar cell and module firms have halted production. Some firms even plan to sell equipment.
To compete with China-based firms in the mainstream P-type mono- and multi-crystalline solar market is not easy, despite the ongoing trade war between the US, EU, and China. However, orders have been transferred to Taiwan because of the trade war. In addition, to avoid high production cost, Japan-based solar firms have begun to increase the percentage of OEM orders to Taiwan.
Market observers believe due to the 2012 feed-in-tariff policy in Japan, China-based firms have been eager to develop Japan's market. This has created competition for Japan-based brands, sending them shifting orders to Taiwan.
Japan-based solar firms have been procuring high-efficiency solar cells and modules from international firms as well. According to media reports, Toshiba and Sharp both announced plans to procure N-type mono-crystalline solar cell modules from US-based SunPower. This means demand for high-efficiency product has been rising in Japan.
Despite rising demand for high-efficiency N-type solar products, Taiwan-based firms have yet to achieve the ability to supply N-type mono-crystalline solar cell with conversion efficiency above 20%. N-type solar product can effectively achieve market differentiation but according to industry sources, so far, no firms in Greater China have the ability to compete with Panasonic's N-type solar product technology.
Cooperation or transfer of risks?
In 2011, among major solar firms in Japan, only Panasonic, a firm that has the ability to produce HIT solar cell, reported net profits of JPY12 billion (US$138 million). Other firms such as Sharp, Kyocera, Solar Frontier, and Mitsubishi reported net losses. The profitability caused other firms to begin R&D on HIT solar products.
Despite the possible profits, the Japan-based firms that hope to work with Taiwan-based peers do not have mass production experience, and Taiwan-based firms would need to be responsible for the capex for equipment, technology R&D, and the risk of failure.
Some Japan-based solar firms can transfer technology to Taiwan-based firms for free because the firms want to diverse the risk and capex of investing in mass production. Therefore, Taiwan-based firms without sufficient funds are unlikely to cooperate.
