Potential short-term concerns regarding power and logistics
There are concerns about the logistics of delivering critical materials to semiconductor fabrication plants and shipping out of Japan, as well as, rolling power outages that may impact production for chip producers, suppliers and sub-component manufacturers. Rolling power outrages may also cause the price of power to escalate, impacting upstream raw materials.
Short term impact on the Solar PV industry
AU Optronics and SunPower may be impacted through their reliance on M. SETEK assets in the affected areas in Japan. M. SETEK has a 3,000 metric ton poly plant expanding to 7,000 metric tons in Soma, Japan and this plant may be damaged and offline for a period of months.
Impact on the Silicon Industry Value Chain
We see immediate concerns to the value chain around 300mm wafering. On the whole, we anticipate that there will be little long-lasting impact to the polysilicon value chain as the current polysilicon supply and demand situation can absorb this level of loss, as illustrated on a macro level, below:
However, this does not preclude the possibility of pricing spikes and short-term inventory accumulations and other issues of sub-optimal efficiency, as the supply chain reconfigures itself.
The projections above are built on our estimates of a relatively modest 9% PV industry growth from 2010 to 2011. This growth scenario reflects:
- Reduced subsidy support in Germany, making PV installations less attractive
- Module price reductions in 1H2011 coinciding with subsidy reductions to re-start the market