L R AS Published on Tuesday 31 May 2022 - n° 406 - Categories:silicon mono/multi, industry, industrial strategy

Who makes silicon and where? Nobody knows the origin of the silicon used!

In the first half of the year, 50-60 panel suppliers provide 98% of the global supply. The remaining 2% is split between about 50 other companies. There are many ways to

to rank the 100 or so companies that claim to be credible panel suppliers. They can be ranked by volume. Best is to rank them by their bankability or creditworthiness (acceptance by banks to finance their products). Financial health varies far more than manufacturing differences.

Nobody knows the origin of the silicon used

The Xinjiang issue, and thus the auditing of the component supply chain, has become a major criterion for US buyers and for global entities that have a strong moral compass and want proof of transparency and traceability in their sourcing.

Cell and panel manufacturers have very little control over the source of the silicon used. Less than half of the panel suppliers among the top 50-60 producers make their own solar cells. The rest buy cells and assemble them into panels, usually for Chinese end users.

Even the large panel manufacturers buy a large part of their cells from outside

Even the 15 to 20 panel suppliers that manufacture their own cells also buy large volumes of cells from third parties. Only a small category A group manufactures a large proportion of their own cells. None of them manufactures the entire production chain. As far as silicon is concerned, JinkoSolar, JA Solar, Hanwha Q CELLS and LONGi Solar are the most "careful" in terms of cells and panels. The production of cells is considered as a priority as well as the production/supply of panels. Thus, only a small handful of leading panel suppliers can claim to control cell manufacturing (and associated wafer supply and cell processing materials).

The list of panel suppliers that manufacture wafers (and ingots) and cells is even more diluted. In fact, JinkoSolar, JA Solar and LONGi Solar are the only ones that stand out today. None of these companies make their own silicon

The top 50 to 60 panel suppliers have different panel component manufacturing locations in-house. Almost all wafers are manufactured in China, with the notable exception of LONGi Solar (which also produces in Malaysia), JA Solar and JinkoSolar (which also produce in Vietnam). The capacity of these three companies in Southeast Asia is primarily to supply cells and panels to the US market.

The US Commerce Department's investigation in recent months creates another level of scrutiny on the underlying "who manufactures what and where" debate. Panel production is dominated by assembly facilities in China and Southeast Asia, particularly in Vietnam, Malaysia, Thailand, Singapore and Cambodia.

Panel manufacturers differentiate themselves according to the geographical areas of marketing

Another aspect that differentiates the 50-60 panel suppliers is the destination of the panels (such as Europe, USA). Indeed, some companies manufacture only for their domestic market.

Global panel purchasing agreements are becoming increasingly common in the solar industry, driven by international companies, large energy utilities and diversified investors/funds. About 20 of the top 50-60 panel suppliers can be considered credible global players. Within this group, about half a dozen regularly serve each of the key end-market countries/regions. The others tend to be strong at the national level and then have a few foreign markets on which they concentrate their sales and marketing resources.

The lack of global panel suppliers has thus emerged unintentionally by the panel manufacturers. Some companies only supply the domestic market. Exporting is then an unnecessary luxury. Others have sought to diversify their sales geographically, but have run into commercial problems in the US, Europe or India. Some have found it useful to establish themselves industrially in these countries to avoid import duties.

The US has created the biggest barrier to entry for panel suppliers. The rest of the world is still largely open to Chinese-made panels. Manufacturers use an all-Chinese supply chain. Most likely, the barriers to entry for panels in the US will spread to other countries.

Do the panels contain silicon produced in Xinjiang? How do we know?

To be accepted abroad, panels must not contain silicon (or metallurgical grade silicon) produced in Xinjiang; better still, to be truly safe, they must be manufactured outside China. Ideally, the ingots and wafers should be produced by the company selling the panels. The cells used and the panels should be manufactured in-house by the vendors and not outsourced. Ideally, the cells and panels should be produced in countries that remove all import duties arising from AD/CVD, Section 201 or AntiCirc barriers (if any).

The panel supplier must have a credible track record of supplying (on time and with reliable products) to solar power plants in the US. It must also be financially sound or stable. It must have met previous contractual delivery agreements. These conditions are currently impossible to meet. No change expected within 18 months

The change could come from the willingness of major suppliers to engage in upstream manufacturing in different parts of the world, and no longer by industries based in South East Asia or panel assembly plants in the US. The move should lead a major player already in silicon to set up gigawatt-scale manufacturing from ingot to panel in key regions: India, Europe, North America. This would be the way to avoid the risks of tariffs. This could happen in 2024 or 2025.

https://www.pv-tech.org/panneau-supply-to-the-pv-industry-in-2022-factors-driving-changes-across-manufacturing-and-supply-chains/

PV Tech of 18 May 2022

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