In addition, growth rates for the backlog of solar photovoltaic manufacturing equipment returned to single-digit percentage levels, similar to trends observed at the end of 2008 following the last phase of strong PV tool ordering activity.
Source: Solarbuzz, USA.According to Finlay Colville, Senior Analyst at Solarbuzz, "The latest PV Book-to-Bill figures are a direct consequence of PV cell manufacturing equipment suppliers ramping up deliveries following the strong order backlog accumulated during 1H'10, and these figures were matched by record PV tool revenues reported by several leading PV suppliers during Q3'10."
Historically, Book-to-Bill ratios have been widely adopted by various technology sectors to assess their overall health. In general, a Book-to-Bill ratio of greater than 1 (or parity) is indicative of a strong market. Conversely, a Book-to-Bill ratio below parity provides signs of an unhealthy environment with softening equipment demand.
A Book-to-Bill ratio compares the total amount of orders received to the total amount of product shipped and billed within a given period. It is the ratio of demand versus supply in the equipment supply chain. If the supply chain receives the same level of new orders as it can deliver, this still represents a healthy scenario, but with scope for growth.
If the supply chain has fewer orders than it can deliver, this shows as negative growth. A PV Book-to-Bill ratio of 1.16 means that US$116 worth of orders were received by PV equipment suppliers for every US$100 of product billed for the preceding quarter under review.
Colville added: "Until now, there has been no Book-to-Bill information for the PV industry. Indeed, reporting on the PV equipment supply chain as a whole has received less attention when compared to other aspects of the solar industry. This has provided challenges for equipment suppliers when seeking to benchmark their performance against both industry averages and process tool segments within their served markets."
PV Book-to-Bill explains revenue growth patterns
During 2010, PV manufacturing equipment revenues will easily exceed the $10 billion level, with Applied Materials recently becoming the first equipment supplier to pass the $1 billion threshold for PV specific tools within a trailing twelve month trended period. Several other tool suppliers will also report PV revenues during 2010 in excess of $500 million.
While c-Si cells will account for 85-90 percent of PV production during 2010, the breakdown of PV equipment revenues by technology reflects a broader contribution from the c-Si and thin-film segments, indicative of continued investment into established and emerging production types.
In fact, the second cycle in thin-film fab investment is forecast to peak during 1H'11, with strong equipment revenues forecast from fabs currently at the build-out phase.
In contrasting to on-going capacity expansions, downstream demand for PV modules during 2011 is likely to be subject to a range of policy driven uncertainties. Therefore, specific checks are urgently needed to monitor the level and timing of the most recently announced expansion plans for 2011, with a more robust means of assessing pending capacity over-supply within the industry among top tier producers.
The PV Book-to-Bill analysis provides a direct measure of equipment ordered by PV producers, existing tool backlogs with suppliers, and tools currently being delivered to PV fabs. With equipment lead times ranging from 3 to 12 months, changes in the PV Book-to-Bill figures provide a direct means to assess whether announced expansion schedules are being enacted.
Source: Solarbuzz, USA.
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