Wafer and Cell Inventory Pressure Emerging as the Solar PV Supply Chain Returns to a Downward Pricing Cycle

Polysilicon

High inventory levels coupled with additional supply are significantly increasing downside risk. Current polysilicon inventories remain elevated at around 520,000 metric tons, while the expected resumption and ramp-up of production by Tongwei in June is projected to add approximately 3,000 metric tons of new supply, further intensifying oversupply concerns.

Following the recent industry exhibition, market sentiment has turned increasingly bearish. Against the backdrop of swollen inventories, weakening wafer prices, and aggressive low-price selling by some producers seeking to move inventory ahead of competitors, polysilicon prices are declining at an accelerated pace. Market participants widely expect further price corrections in the near term.

Wafers

Inventory reduction pressure is building while cost support continues to weaken, driving transaction prices lower. Wafer inventories have edged up to approximately 28 GW, highlighting growing inventory-clearing challenges. Since the exhibition, a broader price-cutting atmosphere has spread across the industry, with downstream buyers remaining highly cautious and overall trading activity subdued.

With upstream polysilicon prices falling and eroding cost support, downstream demand yet to show a meaningful recovery, and bearish market expectations gaining momentum, wafer prices remain exposed to considerable downside risk in the short term. Wafers are a key intermediate product between polysilicon and solar cells within the crystalline silicon PV value chain.

Cells 

Inventory accumulation is becoming apparent, while declining input costs are exerting additional downward pressure on prices. Cell inventory turnover has increased to around 10 days, indicating the early stages of inventory build-up.

On the cost side, the simultaneous decline in both wafer prices and silver prices has rapidly weakened the cost floor for cell manufacturers. Against a backdrop of slower-than-expected market demand recovery and strong downstream efforts to negotiate lower prices, solar cell transaction prices are likely to face further downside pressure in the short term.

PV Modules

Underlying demand remains weak, pushing module prices back into a downward cycle alongside the broader supply chain. Current module procurement activity is primarily driven by essential replenishment needs and deliveries against previously awarded contracts, while low-priced products continue to dominate the market. Market demand has yet to demonstrate a meaningful recovery.

With declining cell prices undermining upstream cost support, module production costs have fallen accordingly. Average market prices have now retreated to the range of RMB 0.72–0.75/W. Market participants remain largely on the sidelines, and procurement activity has slowed. As a result, module prices are expected to remain under pressure and continue tracking the overall weakness across the PV supply chain. Modules represent the final assembly stage, where photovoltaic cells are interconnected and encapsulated into a market-ready solar product.