At present, the four links of silicon materials, silicon wafers, batteries and components at the photovoltaic manufacturing end have entered the stage of overcapacity, slowing down the competition in the industry, making steady innovation and common progress possible. the rapid explosion of new PV installed capacity in the world, while constantly refreshing the development speed of the industry, it also attracted a large number of funds" crazy "into the industry. By the end of 2023, the production capacity of silicon materials, silicon wafers, cells and modules at the photovoltaic manufacturing end will exceed 900 GW. According to the data of Yangtze Securities Research Institute, the global component demand forecast in 2023 and 2024 is 525GW and 645GW respectively, and the industry has entered a surplus stage.
In the context of overcapacity, although the leading enterprises are still expanding production and new players are still entering the market, the pace of the participants has slowed down significantly, and they have begun to hold a more obvious wait-and-see trend. So how can photovoltaic industry break the deadlock now that competition in the industry is slowing down and steady innovation and common progress are possible? Li Zhenguo, president of Longji, predicts that by 2030, the new installed capacity in the world will need to reach 1500 GW to 2000 GW per year, and will need to be installed for 30 years in order to effectively support the global energy transformation.
It has a huge market space. With the huge growth opportunities brought by the photovoltaic track and the importance human beings attach to clean energy, we can conclude that the future of photovoltaic is naturally bright.
Of course, now looking at the secondary market, the photovoltaic industry is indeed the representative of the "green" economy, often green. The involution caused by overcapacity directly affects the healthy development of the industry as a whole. This conflict between long-term optimism and short-term pessimism can not help but make people more irritable: how can optimistic future of photovoltaic be realized? However, only a fulcrum, a link that can break this model, the photovoltaic industry can break the situation. In the main industry link, the silicon material link should shoulder the heavy responsibility as the anchor point of the industry because of its excellent competition pattern, great influence on the source, determined technical route and great cost difference between enterprises. The
polysilicon "Battle Royale"
link is the upstream of the main industrial chain and has chemical attributes. This chemical attribute has both advantages and disadvantages: compared with the downstream link, the silicon material link has less capacity elasticity, and the periodicity is relatively more obvious from the historical point of view. When the industry goes up, the gross profit rate increases the most, and when the industry goes down, the gross profit rate generally decreases the most.
From 2011 to 2012, Europe and the United States double reverse superimposed subsidies withdrew, exports collapsed, and polysilicon once fell from the industry's largest profit to the industry's largest loss.
From 2020 to 2022, such landmark events as photovoltaic parity, China's double carbon target and the conflict between Russia and Ukraine stimulated the demand for photovoltaic installation, and the price of silicon materials rose rapidly, which once earned the most profits in the industry.
If we proceed from this logic, the gross profit of silicon materials will be lower than that of other links in the next year or two. Especially under this premise, the polysilicon link will continue to be the largest surplus link from Q1 in 2024.
Of course, perhaps the situation in the silicon sector will not be so pessimistic. From 2011 to 2012, the demand slowed down periodically due to policy reasons, and the problem of terminal demand brought about the downward adjustment of industrial chain prices, and the industry shrank and prices fell. But now the downward cycle is due to the substantial release of production capacity brought about by the stimulation of market conditions, and the increase of supply side far exceeds the increase of demand, which drives the price of the industrial chain down and the price of the industry down. That is to say, the biggest crisis in the silicon industry comes from the landing of incremental supply.
At this time, the silicon material link brought by chemical attributes is not friendly to new players, but has become its own "protective symbol". When the money is in place, the project may not fall to the ground; when it is running, it may not be able to produce stable products. Large technical and technological barriers, heavy investment, long expansion cycle, high difficulty in climbing, steep cost curve.. These challenges make it impossible for many planned production capacity to land as scheduled. Since
this year, new projects such as Hesheng, Baofeng and Hongyuan have been postponed to varying degrees. At the same time, in September, many projects in the industry (Daquan, Inner Mongolia Dongli, etc.) also had different degrees of accidents, affecting the output of that month, so the output that can really be released next year is still uncertain.
Even if the product can be produced, cost control is the second "roadblock". Unlike other links, where the investment scale of a single project is small, the entry threshold is low, and it is relatively easy for enterprises to cross the border, the head enterprises in the polysilicon link are concentrated, the project scale is large, the process is difficult, and the cost difference between enterprises is significantly greater than that between enterprises in other links. It's hard for new people to get into the game, so it's the turn of the old people.
That is to say, the polysilicon sector is now ready for the "Great Escape" and can be the first to start clearing excess capacity.
So when do enterprises withdraw from the market? When P > ATC (average total cost), the enterprise can make a profit; when P = ATC = MC (marginal cost), the market is in equilibrium; when P As it happens, the single project in the polysilicon sector has the characteristics of large investment, large capital demand, and inability to flexibly adjust the production rate, which requires higher capital strength for enterprises. Once an enterprise falls into cash cost loss, it will cause greater cash flow pressure than other enterprises. At present, the financial pressure faced by new entrants in the silicon material sector is greater than that faced by new entrants in other sectors, so when there is a serious surplus in each sector, the capacity clearance speed of the polysilicon sector is expected to be faster than that of other sectors, thus boosting the profitability of the silicon material sector. The author predicts that the silicon material link will become the breaking point of the whole photovoltaic industry by first breaking the situation and clearing the excess capacity. Dare to ask where "light" is? Regardless of capital, production capacity, technology and reputation, the second and third-tier enterprises are not competitive, and these enterprises may gradually be cleared. Taking Tongwei, the leader of silicon materials, as an example, according to the marginal demand calculation next year, it is higher than cash cost. 4. If we consider the continuous increase of the proportion of Tongwei N-type silicon materials and the sales premium brought by the quality advantage of P-type products, it can still maintain at least 0 in the case of industry liquidation. Many second-and third-tier silicon materials factories can not withstand the pressure of loss. It can only stop production for maintenance. Under the premise that the market share has been in the lead, the direction of continuous progress of each enterprise is two aspects: strategic layout and cost reduction. In order to ensure the stability of the supply chain and realize the maximum profit interception of the industrial chain, the head photovoltaic enterprises all adopt the "integration" mode to realize the extension to the upstream or downstream. According to the latest disclosed data, it is indeed the most influential and advantageous integrated head enterprise. Among them, Daqo and Xinte are still relatively simple in the silicon material sector, while Tongwei and Xiexin have chosen the integrated strategic layout, which are also the leading enterprises in the silicon material sector to improve Siemens method (rod silicon) and silane fluidized bed method (granular silicon). Tongwei has a layout in four links and power stations, and the battery link has also achieved the leading position, while Xiexin focuses on silicon materials, silicon wafers and power stations. The choice of polysilicon reduction method can also be said to be a part of the strategic layout, and this choice directly affects the subsequent cost control and quality improvement. The author will not elaborate on the specific process differences between the improved Siemens method and the granular silicon method. From the cost point of view, according to the author's understanding, the best in this respect is Tongwei and GCL: GCL, depending on the replacement time of the liner and the time required to restart production, the cost is 3. However, if we consider the factors that affect the profit guarantee, such as technology maturity, production stability, product quality, etc., the granular silicon technology still has a lot of room for improvement compared with the stable and mature rod silicon. Especially with the continuous penetration of downstream N-type products, downstream customers have higher and higher requirements for the quality of silicon materials, so it is urgent to improve the quality space and production stability of granular silicon technology. Where is the "light" of photovoltaic industry? Looking forward to breaking the deadlock in the silicon material sector, leading the industry through the cycle, and realizing the bright future of the photovoltaic industry.
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