Taiwanese solar cell makers are expected to feel the pinch of sluggish demand this quarter as prices fall below cost amid deep cuts in government subsidies in Europe, a Taipei-based market researcher said in a weekly report.
However, local polysilicon suppliers and solar system installation service providers will be less affected by the industry slump and could remain profitable this quarter, TrendForce Corp (集邦科技) said on Wednesday.
INTO THE RED
Solar cell makers are expected to drift into the red this quarter as they bear the brunt of a sharp decline in demand and prices.
“The second quarter will be a trying period for solar cell companies because of lackluster prospects,” TrendForce said. “It is highly possible that the price will drop further to below US$1 per watt as there are no signs indicating a recovery soon after prices fell to near the cost level of US$1 per watt.”
To minimize price erosion, solar cell manufacturers such as Motech Industries Inc (茂迪), Gintech Energy Corp (昱晶) and Solartech Energy Corp (昇陽光電) have cut output to cope with sagging demand, driving down their factory usage to about 80 percent, which means higher cost per unit because of heavy equipment depreciation, the researcher said.
PRICES PLUNGE
TrendForce said the price of solar cells plunged 5.66 percent to an average of US$1.034 per watt this week from a week ago, with the lowest price hitting US$0.9 per watt. Prices had plunged 2.92 percent the previous week.
Motech, the nation’s biggest solar cell maker, said last week it expected solar prices to slide slightly this quarter from last quarter.
PROFITS DECLINE
The company reported its smallest quarterly profits for the first quarter at NT$680 million, a decline of 53 percent from the NT$1.46 billion profit in the final quarter of last year. Gross margin plummeted to 12.5 percent, the lowest in five quarters, from nearly 20 percent.
Shares of Motech, Gintech and Solartech yesterday dropped 1.4 percent, 2.59 percent and 4.21 percent respectively to NT$105.5, NT$75.2 and NT$63.7.
HANDOVER POLICY: Approving the probe means that the new US administration of Donald Trump is likely to have the option to impose trade restrictions on China US President Joe Biden’s administration is set to initiate a trade investigation into Chinese semiconductors in the coming days as part of a push to reduce reliance on a technology that US officials believe poses national security risks. The probe could result in tariffs or other measures to restrict imports on older-model semiconductors and the products containing them, including medical devices, vehicles, smartphones and weaponry, people familiar with the matter said. The investigation examining so-called foundational chips could take months to conclude, meaning that any reaction to the findings would be left to the discretion of US president-elect Donald Trump’s incoming team. Biden
INVESTMENT: Jun Seki, chief strategy officer for Hon Hai’s EV arm, and his team are currently in talks in France with Renault, Nissan’s 36 percent shareholder Hon Hai Precision Industry Co (鴻海精密), the iPhone maker known as Foxconn Technology Group (富士康科技集團) internationally, is in talks with Nissan Motor Co’s biggest shareholder Renault SA about its willingness to sell its shares in the Japanese automaker, the Central News Agency (CNA) said, citing people it did not identify. Nissan and fellow Japanese automaker, Honda Motor Co, are exploring a merger that would create a rival to Toyota Motor Corp in Japan and better position the combined company to face competitive challenges around the world, people familiar with the matter said on Wednesday. However, one potential spanner in the works is
HON HAI LURKS: The ‘Nikkei’ reported that Foxconn’s interest in Nissan accelerated the Honda-merger effort out of fears it might be taken over by the Taiwanese firm Nissan Motor Co has become the latest buyout target in Japan as it explores a merger with Honda Motor Co and faces an overture from Hon Hai Precision Industry Co (鴻海精密), known as Foxconn Technology Group (富士康科技集團) internationally. Shares in Nissan yesterday jumped 24 percent, the most on record, to hit the daily limit, after the two Japanese automakers acknowledged that talks are ongoing to better position themselves for competitive challenges during a time of upheaval in the global auto industry. Foxconn — a Taipei-based manufacturer of iPhones, which has been investing heavily in factories to build electric vehicles — has also
CHIP SUBSIDY: The US funding would help alleviate the financial pressure from building two fabs in the US and should lift gross margins in 2026, the company said GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said it is to receive US$406 million in subsidies from the US Department of Commerce for two new US fabs under the CHIPS and Science Act, with the first batch of the funds likely coming next year. The grant represents 10 percent of the planned investments of US$4 billion in advanced semiconductor wafer manufacturing facilities in Texas and Missouri, GlobalWafers said. The commerce department is to disburse the funds based on the completion of project milestones over a multiyear timeframe, the company said. Along with the tax credit, which is equal to
RSS