2010 revenues for PV equipment suppliers driven by products offered and customers targeted

USA: PV equipment spending by c-Si ingot-to-module and thin-film panel manufacturers reached record levels during 2010, growing by 88 percent Y/Y to $10.4 billion, as annualized ramped manufacturing capacity increased to 28.8GW. Moreover, further expansion plans announced by PV cell manufacturers for 2011 and 2012 indicate that equipment spending is projected grow by a further 10 percent in 2011.

At first glance, these headline figures might suggest that all PV equipment manufacturers, previously engaged within the PV supply-chain prior to 2010, have been reporting record revenues and accumulating strong order backlogs for shipment during 2011.Source: Solarbuzz.

In practice however, this assumption applies only to certain tool builders: not the entire supply-chain.

During 2010, PV equipment suppliers had their breadth of product portfolio, PV technology types served, and geographic sales coverage put firmly to the test.

Indeed, strategic planning across these themes has now emerged as a leading indicator of market-share and performance of PV equipment suppliers for 2011. This article discusses factors which impacted most on PV equipment spending during 2010, and explains why product positioning and target customer selection will continue to guide the fortunes of equipment suppliers in 2011 and beyond.

All data and graphs shown are adapted from analysis contained within the new Solarbuzz PV Equipment Quarterly report, released January 17, 2011.

Tier 1 c-Si producers impose their strategy and roadmaps onto supply-chain
While the GW+ aspirations of the tier 1 c-Si producers in China and Taiwan had a profound impact on c-Si cell manufacturing competitiveness during 2010, the effect on the PV equipment supply-chain has been equally significant and far reaching. Not only have c-Si tool revenues and backlogs migrated from legacy c-Si manufacturing hubs, but equipment supplier preferences and technology roadmap adoption rates have been reset.

As a result, the performance of individual c-Si equipment suppliers during 2010 was largely a reflection of how well positioned they were to react to these changes.

At end Q4'10, ramped c-Si cell manufacturing capacity in China and Taiwan represented 67 percent of worldwide c-Si capacity, with 65 percent categorized as tier 1 enabled (low processing costs, volume production, strong market acceptance for product). During 2010, equipment shipped for c-Si cell expansions within these two countries represented over 75 percent of tool revenues available to the supply-chain.

New entrants to c-Si cell manufacturing continued to provide a viable (albeit diminishing) opportunity for turn-key c-Si line suppliers, less influenced by tier 1 tool preferences in China and Taiwan: but the majority of equipment spending (~90 percent) during 2010 was for single process tools from key equipment suppliers.

Indigenous tool builders historically aligned closely with early PV capacity in Japan and Europe - who were relying mainly on new c-Si ingot-to-cell expansions within these regions - represented some of the biggest casualties during 2010.

This was particularly evident in the declining revenues and backlogs from various European c-Si ingot furnace equipment suppliers and Japanese c-Si cell process tool suppliers who had previously enjoyed strong PV-specific revenue growth during 2005 to 2009.

The c-Si manufacturing shift from Europe to China has also impacted on high-efficiency c-Si roadmaps and adoption rates for new process equipment. While first generation high-efficiency c-Si cells received strong visibility within the R&D community and European c-Si expansions were accompanied by high-profile regionally-funded R&D programmes, Chinese c-Si cell manufacturers are exhibiting considerably more in-house ownership of high-efficiency roadmaps today.

This is matched by a somewhat more pragmatic approach to new cell types, with greater emphasis during 2010 placed on process cost reduction than efficiency enhancement as a lower risk means of scaling production quickly to meet downstream demand.