Zhongxin Jingwei, December 29 Topic: Under the surplus of the industry, Tongwei shares are expanding production against the trend, and the risk is geometric
Written by Yang Xit and a researcher at Anbound.
Recently, Tongwei Co., Ltd. announced that it will invest 28 billion yuan in two phases to build new production capacity in the Zhunger Economic Development Zone, Zhunger Banner, Ordos City, and expand production capacity in the two upstream links, including industrial silicon and high-purity crystalline silicon, which are the source of photovoltaics. According to statistics, this is the fourth time that Tongwei has announced its expansion plan this year, and the total investment amount of these four expansion plans has been close to 65 billion yuan.
Judging from the location of Tongwei's proposed investment expansion project, Ordos in Inner Mongolia has a relatively low electricity price, which is an important cost advantage. Secondly, the Ordos region has perfect supporting resources in the upstream and downstream of the photovoltaic industry chain, as the upstream link of the photovoltaic industry, Tongwei's expansion plan involves the production of industrial silicon and high-purity crystalline silicon, which rely on stable raw materials, production technology and perfect industrial chain support. Choosing Ordos can better integrate local industrial chain resources, improve production efficiency, reduce logistics costs, and consolidate Tongwei's cost advantage.
From a technical point of view, although p-type batteries still occupy the mainstream of the industry, with a market share of 85%. However, due to the p-type battery, the theoretical conversion efficiency limit is 245%, resulting in the p-type cell efficiency is difficult to be greatly improved, and the n-type technology is the mainstream of the next generation of crystalline silicon cell technology, with short process, high conversion efficiency, strong anti-attenuation, high bifaciality, low temperature coefficient and other characteristics, which can improve photovoltaic power generation, reduce power generation costs, and have broad development prospects. The new production capacity to be built by Tongwei is expected to be more suitable for the demand brought by the iteration of downstream n-type technology.
From the perspective of enterprises, Tongwei Co., Ltd. continues to expand advanced production capacity, accelerate the iterative upgrading of advanced technology and clear the production capacity of backward technology, and by cleaning up backward technology production capacity, it shows that Tongwei Co., Ltd. has made up its mind to optimize resource allocation and improve the overall industrial technology level, which is also Tongwei's strategic deployment all along.
However, it should be pointed out that the photovoltaic field is still facing the problem of excess capacity, and the demand side is under great pressureThe imbalance between supply and demand in the photovoltaic industry has led to intensified competition in the industry, and it is difficult to transmit costs to the downstream. Tongwei's increase in production capacity this time may lead to further intensification of competition within the industry if the market is unable to absorb these production capacity in the future.
In the case of a declining trend in photovoltaics, the planned polysilicon production capacity of some enterprises has been postponed, and investment may even be terminated. Judging from Tongwei's expansion investment plan, the new production capacity after the expansion still needs to be climbed, and the effective output of this part of the new capacity is expected to be realized from 2025 to 2026. During the new round of adjustment of the photovoltaic industry, Tongwei's expansion plan will enable Tongwei to accelerate its grasp of the cost advantage of raw materials, and also prepare for its development in the next photovoltaic industry cycle.
In the past few years, the photovoltaic industry has been surrounded by capital and policies, and the money-making effect has increased rapidly, and the number of cross-border enterprises has gradually increased. According to statistics, in 2022, at least 80 A-share companies will step into the photovoltaic industry, including energy, liquor, real estate, home appliances, toys, dairy products, printing, electronic equipment and other fields, with cross-border investment in the photovoltaic market of more than 300 billion yuan, and these companies mainly focus on the research and development of a new generation of battery components. However, most companies are still in the concept stage, and only a few are in order to expand their business territory, so that there are few companies that have succeeded in cross-border transformation, and more companies will choose to stop loss and announce the termination of the plan in 2023 in the face of the downside and loss risk of the photovoltaic industry chain.
Looking forward to 2024, the author believes that the fluctuation of the industrial chain is unavoidable, and it may hit a new low, depending on the operating rate and production scheduling of photovoltaic enterprises. In the process of reshuffling the photovoltaic industry, second- and third-tier photovoltaic manufacturers will face the risk of bankruptcy. With the promotion of leading enterprises and the exit of small and medium-sized enterprises, large enterprises can survive the downturn more smoothly by virtue of their capital and cost advantages. As end markets struggle to adapt quickly to volatility, the PV industry's concerns in 2024 will revolve around cost-margin and supply-demand balance.
At present, China's photovoltaic industry has entered a mature period of development and entered the knockout stage, and it is estimated that the first period will be in two to three years, which will be used to precipitate the technology of the industry and integrate into the market.
Therefore, in the long run, the photovoltaic industry is now facing a phased and structural overcapacity. The industry is facing technological iteration, and the recent layout of photovoltaic companies is also anchored to advanced production capacity, so backward production capacity will be the first to go out. With the "double carbon" goal to support the bottom, the global photovoltaic terminal market demand will remain strong for a long time, and the overall photovoltaic market will also be full of opportunities. (Zhongxin Jingwei app).
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