El Segundo, Calif. (Sept. 23, 2013)—Are major solar module and cell manufacturers on the verge of outsourcing a significant portion of their production and establishing a fabless business model, similar to the approach commonly used in the semiconductor market?
With top-tier suppliers highly protective of their competitive advantage in manufacturing technology, the answer to that question is “not likely,” according to the PV Manufacturing & Capital Spending Tool from IHS Inc. (NYSE: IHS), a leading global source of critical information and insight.
After years of oversupply, the supply and demand for solar devices is returning to a state of balance. Because of this, IHS today is reiterating its forecast that global capital spending by producers of photovoltaic (PV) modules, cells, ingots, wafers and polysilicon is expected to rise by 30 percent in 2014 to reach right around $3.0 billion, the first time that expenditures will have risen since 2011.
The attached figure presents the IHS forecast of capital spending in the global solar supply chain.
“Some analysts have claimed that top Chinese and Japanese module makers are utilizing excess manufacturing resources from second- and third-tier manufacturers, expanding their available capacity and thus staving off any requirement for new capital spending,” said Jon Campos, solar analyst at IHS. “Such a fabless or asset-lite strategy may have worked in other industries, where some companies with minimal or no manufacturing assets—such as Qualcomm Inc. of California—have achieved great success. However, in the PV market, where manufacturing expertise is more proprietary than in other areas, the fabless model is unlikely to be adopted on a large scale. This means that leading solar suppliers must make capital investments as demand rises in the coming years—even if extra capacity is available from other PV industry suppliers.”