January 17, 2011 -- Quarterly photovoltaic (PV) manufacturing equipment spending by c-Si ingot-to-module and thin-film solar panel producers grew for the sixth consecutive quarter during Q4'10 to US$2.9B, as double-digit Q/Q manufacturing capacity growth continued to grip the PV industry. Rising equipment demand from Asian cell manufacturers will be the primary driver of global industry revenues during 2011, forecast to grow from $10.7B in 2010 to $11.7B.
Driven by vertical integration aspirations of tier 1 Chinese c-Si producers and strong investment into existing and emerging thin-film technologies, a further 1.25GW of quarterly manufacturing capacity came online during Q4'10, bringing annualized c-Si cell and thin-film panel capacity added during 2010 to 11.5GW, according to the latest Solarbuzz PV Equipment Quarterly report. "Equipment suppliers aligned with tier 1 customer expansions and their process technology trends are posting record quarterly revenues, while at the same time accumulating tool backlogs in excess of trailing twelve month (ttm) revenues," noted Finlay Colville, senior analyst at Solarbuzz. "Leading equipment suppliers Applied Materials, Centrotherm, GT Solar and Meyer Burger are now trending with ttm PV revenues exceeding $500M, while emerging process tool suppliers such as Amtech Systems, DEK-Solar, Despatch Industries and Jusung Engineering are projected to post Y/Y PV-specific revenue growth rates between 220% and 360%."
With strong capacity expansions in excess of 60% Y/Y also announced for 2011, bookings for preferred equipment suppliers are driving tool backlogs to levels that have not been seen since 2008, when high-value turn-key thin-film business was a key contributor. At end Q4'10, there are now 20 equipment suppliers with order backlogs in excess of $100M, with the majority of these orders scheduled for shipment during 1H'11. The total PV equipment backlog saw 26% Y/Y growth vs. Q4'09, reflected in the PV Book-to-Bill ratio, which averaged well above parity (1.24) for 2010 and peaked at an eight-quarter-high of 1.7 during Q2'10.
Figure 1. PV equipment backlog technology indicator. Source: Solarbuzz PV Equipment Quarterly.
Applied Materials remains PV revenue leader for 2010, but Centrotherm positioned for number 1 spot in 2011
Q4'10 equipment spending patterns were again characterized by themes having a dramatic effect on the market-share and performance of PV equipment suppliers. Tier 1 c-Si manufacturers remain committed to capacity expansion by placing high-volume orders on preferred process tool suppliers. CIGS and CdTe expansions provided strong bookings for a variety of thin-film deposition tool suppliers, often based on customized product offerings. Asian-based turnkey equipment suppliers continued to dominate a-Si/uc-Si bookings and shipments, analogous to Applied Materials, Oerlikon, and ULVAC's market entry several years ago.
However, it was the geographic shift in PV manufacturing to China, Taiwan, and Southeast Asia that represented the greatest opportunity for the equipment supply-chain, with 85% of c-Si cell revenues and 60% of thin-film revenues during 2010 attributed to PV manufacturers across these regions. Revenues available for tool suppliers from European PV manufacturers continue to decline. Collectively, Centrotherm and Roth-&-Rau generated only 12% of PV revenues from European customers in 2010, compared to 33% back in 2008.
The leading equipment beneficiary during 2010 was Applied Materials with strong process tool supply to tier 1 cell manufacturers, supplemented by deferred revenue recognition from legacy turn-key thin-film shipments. Full year PV-specific revenue estimates of US$1.3-1.5B are more than US$500M greater than any other PV equipment supplier for 2010.
In 2011, equipment spending for the c-Si ingot-to-module and thin-film panel segment is forecast to grow to $11.7B, but remains subject to a number of uncertainties. This includes the precise phasing of expansions enacted by all thin-film manufacturers (with the exception of First Solar) and the effects of possible c-Si module over-supply during 1H'11. Leading equipment suppliers will be those with both strong market-share and a broad range of products spread across the various served addressable markets for PV equipment suppliers today.
With a flexible product portfolio spanning the entire c-Si value-chain and the option of supplying either single process tools or turn-key c-Si lines, Centrotherm has emerged as the equipment supplier to watch during 2011. Revenues in 2010 increased each quarter with over 75% coming from single process c-Si tools, heavily weighted towards end-users across Asia. In addition, the capability to offer standard or high-efficiency c-Si lines and upgrade packages completes a balanced portfolio, which can readily adapt to changes in customer profile or demand.
"Understanding that the total addressable market for PV equipment suppliers is comprised of different served market segments remains an essential part of equipment suppliers' growth strategies," adds Colville.
Each equipment segment has unique commercial challenges including: competitive landscape, revenue growth rates, technology roadmaps, and supply-chain preferences. The Solarbuzz PV Equipment Quarterly report provides the tools to enable PV equipment suppliers to navigate around these challenges by identifying target customers or competitors, equipment revenues on offer down to the key process tool level, and the precise timing of each PV manufacturer's announced fab expansion plans by quarter out to 2014.
The Solarbuzz PV Equipment Quarterly features a capacity and production database incorporating Solarbuzz’s proprietary industry knowledge across over 300 c-Si cell and thin-film panel producers, and a PowerPoint report with analysis on technology and equipment spending trends. All data and analysis is updated on a quarterly basis and includes expansion and spending activity from the immediate quarter closed for over 1000 capacity expansion phases out to 2014. The performance of leading PV equipment suppliers is analyzed, including PV-specific revenues, bookings, and backlogs, updated on a quarterly basis.
Solarbuzz, part of The NPD Group, is a globally recognized market research-based business focused on the solar energy and photovoltaic industries. For more information, visit http://www.solarbuzz.com/
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