PV book-to-bill forecast to dip sharply below parity before rebounding in Q4’11

SAN FRANCISCO, USA: In Q1’11, the consolidated PV Book-to-Bill posted a three-month average of 1.01, according to the PV Book-to-Bill analysis featured in the forthcoming Solarbuzz PV Equipment Quarterly report. During 2H’11, the PV Book-to-Bill is forecast to dip sharply below parity before rebounding in Q4’11. New order intake will be driven by polysilicon fab expansions and the next phase of c-Si ingot-to-module equipment spending.

The PV Book-to-Bill ratio compares new-order-intake to revenues-recognized within a given period. It is the ratio of demand to supply in the equipment supply chain. A PV Book-to-Bill ratio of 1.01 for Q1’11 means that US$101 of new orders was received by PV equipment suppliers for every US$100 of recognized product revenues.

According to Finlay Colville, Senior Analyst at Solarbuzz: “PV equipment suppliers remain confronted by a highly fragmented manufacturing landscape, comprised of hundreds of potential customers each at varying stages of technology acceptance and product competitiveness. Understanding the role of book-to-bill ratios at the process tool level, and how each of these is likely to trend moving forward, provides an external benchmarking resource for tool makers to complement their internal marketing strategies.”

2009 and 2010 were characterized by huge PV equipment demand in an environment where even tier 2 and 3 PV manufacturers had little difficulty accessing finance for their capacity expansions. However, 2011 and 2012 represent a harsh reality check on tool makers’ order books as manufacturing expansions retrench primarily to tier 1 companies. Sharp declines in book-to-bill ratios are currently being posted by equipment suppliers that have been over-dependent on c-Si expansions in Europe, tier 2 c-Si spending from China, and speculative thin-film investments.

“Tool suppliers that are waiting for repeat business from these customer types and those without sufficient exposure to leading Asian producers will be most at risk during 2012,” added Colville.Source: Solarbuzz.

PV book-to-bill enhanced to provide leading performance indicators
One drawback levelled at book-to-bill analysis is the focus on historic data collection, summarizing activity that is several months out of date. The data feed that emerges from historic book-to-bill reporting represents a lagging indicator of what equipment suppliers have already experienced. Another limitation of previous book-to-bills is their detachment from equipment spending data of fab manufacturers, technology roadmap inflection points, and forecasted downstream market demand.

“Combining process tool book-to-bill data with forecasted equipment spending across all segments offers tool suppliers a means of calibrating their in-house prospects lists derived from field sales intelligence,” added Colville.

Source: Solarbuzz.