Solar Wafer Expected Production Capacity in 2021

Overview of Solar Wafer Manufacturing and Market

This video forecasts production and market trends of solar wafers over the next few years with Joseph Johnson, Manager of Market Intelligence at CEA. Be sure to check out the entire webinar on PV Solar Demand.

Video Transcript

2021 Available Wafer Production Capacity vs. Forecasted Installations

Turning our attention to wafers, which is the next stage in downstream production. And we're using wafer supply and ingot supply almost interchangeably here.

We are seeing a sizable amount of new wafer capacity coming online, not only from the traditional wafer heavyweights like LONGI and Zhonghuan, but also from a number of new entrance, like Gaojing solar and Shuangliang Energy, which promises to bring nearly a hundred gigawatts of new wafer production capacity online over the next several years.

Almost all this new wafer production is targeted at 210 millimeter wafer production, and even suppliers like Jinko and LONGI, which have adhered to the 182 millimeter wafer size. They're also expanding their own wafer capacities and there should be a sizeable portion of these new wafers in either format on the market in coming years.

End of Year Wafer Nameplate Capacities Based on Supplier Expansion Plans, Unadjusted for Utilization and Upstream Supply Constraints

Wafer Manufacturing Dominated by Chinese Suppliers

It is still worth noting that a majority, almost all wafer manufacturing will take place in China. There's really not a lot of demand for wafer production in centralized supply chains right now, outside of China, even if many other regions would wish they could rehome certain aspects of the solar supply chain. Almost all non China wafer production that is located in Asia or Southeast Asia is also owned largely by Chinese players operating facilities overseas. And we certainly see that there is no change in this scenario.

Wafer manufacturing is very capital intensive and only the big suppliers who either have traditional wafer manufacturing, like LONGI, Jinko and Zhonghuan can expand or some of the new players which have access to more financing, more stable financing opportunities in the domestic market can expand. So without any sort of major policy revisions or incentives in other parts of the world, wafer manufacturing is all likely to be concentrated in China, very close to polysilicon production.

Wafer Manufacturing Tied to Polysilcon Production Locations

This also weighs on additional polysilicon production supplier hopefuls. It's very hard to bring polysilicon online overseas when all that polysilicon will eventually have to make its way back to China anyway, in order to be manufactured into wafers. And so this puts foreign produced polysilicon at a decisive disadvantage in relation to domestic Chinese produced polysilicon when it comes to the polysilicon that wafer makers are looking to buy.

Wafer Suppliers Locking in Long-Term Supply Contracts with Polysilicon Producers

And finally, wafer makers are continuing to sign very lengthy long-term supply contracts with polysilicon producers in order to ensure that they have stable supplies of polysilicon in the future. But despite having these prearranged long-term supply agreements, wafer makers are still at the mercy of spot pricing swings, although they may have a little bit more insight and maybe a small cost savings in purchasing their polysilicon.

Almost all of these long-term contracts necessitate that polysilicon pricing is negotiated on a monthly or a another periodic basis point, which means that wafer producers do have to respond to changes in polysilicon pricing in the market. In the future, this could mean that wafer players are in a better position to get a lower, more preferential way, a polysilicon pricing, but until all the additional polysilicon facilities start to come online this is likely not to be the case.

About the Presenter

Joseph C. Johnson is a Manager of Market Intelligence for Clean Energy Associates (CEA). At CEA, he studies PV market trends, technology, upstream supply chains, and supplier quality as part of CEA's Technology and Quality and Market Intelligence departments.