ABB, a major Swiss electromechanical firm, has decided to withdraw from the PV inverter market, selling its PV inverter division to FIMER SpA, an Italian PV inverter firm and paying the latter US$470 million to cover the red ink of the division.
Due to the payout, the company has incurred US$430 million of operating loss in the second quarter and will appropriate US$40 million for the cost of severance and adjustment in the second half, according to a news release issued by ABB the other day.
ABB was the world's sixth largest PV inverter supplier and the third largest supplier in India, in terms of shipment volume, in 2018, according a report issued by Wood Mackenzie Power & Renewables in April. Industrial media, however, have reported that ABB's PV inverter sales have been in a constant decline after acquiring the PV inverter firm Power-One in 2013.
Andreas Willi, an analyst at JPMorgan Chase, pointed out that since 2013, ABB has suffered an accumulated loss of around US$1.5 billion. This includes the loss from the investments and costs for the acquisition of Power-One and its market withdrawal in the PV inverter business.
Daniel Smith, an ABB spokesman, attributed the company's withdrawal decision to the shrinking global demands for PV inverters after their peak in 2012, as well as the acute price competition from the Chinese suppliers.
Currently, Huawei and Sungrow of China rank first and second place, respectively, on the global PV inverter market, with their market shares reaching 22% and 15%, respectively, thanks to their strong price competitiveness, according to Lindsay Cherry, an analyst at Wood Mackenzie Power & Renewables.
Faced with the dire market situation, the Swiss company has been scaling down its PV inverter business in the recent years. This includes the closure of its U.S. plants in 2016. Despite the withdrawal from the PV inverter market, the company will continue to invest in green buildings, energy storage systems, and electric cars.
(Collaborative media: TechNews, first photo courtesy of Bernd Sieker via Flickr CC BY-SA 2.0)