Recently, Taiwanese cell manufacturers’ capacity utilization has dropped because of the countervailing duty (CVD) and anti-dumping duty (AD) issues. However, it is rumored that some makers plan to expand their module capacity. Arthur Hsu, Research Manager at EnergyTrend, described this situation as a reaction to U.S. Department of Commerce’s (DOC) preliminary ruling in CVD, which may is being viewed as potentially beneficial to Taiwanese makers, because the costs of Chinese PV module exports to USA will increase. Therefore, Taiwanese manufacturers expect transferred orders, and plans capacity expansion.
Taiwan's module capacity is more than 1GW every year. If the US, EU and other countries indeed imposes high tariffs on Chinese in the future, Taiwanese modules can be more competitive with costs closer to Chinese modules. However, Chinese manufacturers are evaluating the possibility of building manufacturing facilities in so-called “the third party countries” like Mexico, Eastern Europe and India, where they can offer products with lower costs. As long as the final CVD and AD rulings are worse than Chinese makers’ expectations, they would transfer their capacity to those “third party countries” and start mass production in about one quarter.
“On the other hand, if the rulings impose minimum price and volume quota similar to the EU’s ruling, Taiwanese manufacturers may suffer from module capacity expansion,” said Arthur Hsu. “Under such a scenario, Chinese makers can retain their competitiveness and market share by outsourcing to meet U.S.’s market demand beyond the limited volume.”
Hsu adds that the current global module capacity is around 63.2GW, representing a sufficient supply. Although there is still room for Taiwanese module manufacturers to implement some strategic arrangement, they need to tread carefully when it comes to module capacity expansion. It is necessary to consider global module capacity, high subsidies from Chinese government and product differentiation as well when making such a move.
This Week’s Quotes
Poly-Si wafer’s quote dropped 0.51% to US$0.981/piece due to weaker demand; meanwhile, mono-Si wafers also reduced 0.17% to US$1.196/piece. PV cell’s quotation dropped 1.08% to US$0.365/watt because of lower quotations provided by Chinese and Taiwanese manufacturers. Additionally, the AD ruling scheduled in late July causes a module price reduction of 1.67% to US$0.588/watt.