Component leading enterprises launch a "counterattack": snapping up silicon materials to expand integrated production capacity

SMM Network News: polysilicon shout up, silicon wafer shout up, battery chip shout up …. A rising price tide makes the component enterprises in the lower reaches of the industrial chain but facing the terminal fully appreciate the pain of "plywood", and the pain of breaking the "neck", vertical integration has become the voice of many component enterprises.

As a result, Jingao expansion, Tianhe expansion, Longji expansion, Jingke expansion, component leading enterprises have obviously taken the lead in launching a "counter-offensive", one after another to make up for the "shortcomings" and expand integrated production capacity.

Vertical integration

Combing the mainstream photovoltaic module enterprises active in the market can be roughly divided into vertically integrated component manufacturers and professional component manufacturers.

Compared with the single-link component enterprises, the advantage of the component enterprises covering the whole industrial chain of silicon wafers, battery wafers and components is that, on the one hand, they can strictly control product quality, improve production efficiency and fully reduce production costs. on the other hand, it lies in the matching of all links of the industrial chain to enhance the ability to resist risks.

As a result, the vertical integration route is also highly sought after by established component enterprises, and the top five global component manufacturers Jingke, Longji, Tianhe, Jingao and Ates all adopt an integrated layout.

However, it is not difficult to find that even if it is vertical integration, the core focus of each major enterprise is still different, such as Jingke silicon wafer and component production capacity is much larger than battery wafer, Longji silicon wafer production capacity is large, Tianhe and Ates silicon wafer production capacity is relatively small, and Jingao each link production capacity is the most balanced.

From 2019 to now, the expansion tide with the core goal of cost reduction, market expansion and card technology iteration has begun to sweep the component enterprises, and the leading enterprises have taken advantage of the opportunity to consolidate the main business to expand industrial concentration, and under the tide of rising prices in 2020, the indomitable tide of production expansion has filled the important task of "filling the deficiency board".

In the first half of the year, Jingke expanded its production of 10GW silicon wafers, 17.5GW battery wafers and 27GW components. Qian Jing, vice president of Jingke Energy, said that it will continue to make up the short board. Longji will continue to strengthen the capacity of silicon wafers while expanding the production of 16GW batteries. In the first half of the year, Tianhe focused on the production momentum of components and the construction and technical renovation of 10GW battery projects. Tianhe insiders said that this will not only help control costs, but also reduce purchased raw materials and resist market risks. On September 16th, Jingao announced plans to expand production of 26GW wafers, 9.5GW batteries and 3.5GW in one breath, expanding integrated production capacity in an all-round way.

Improving the degree of integration has undoubtedly become one of the hot routes of component enterprises. In addition to the five major component leaders, Lin Hai feng, founder of Oriental Sunrise, who has made rapid progress in recent years, has also published an article that Oriental Sunrise should consider the vertical extension of the industrial chain. However, he is also worried about the current surging wave of vertical integration of the Penghu pai: "when the vertical integration industrial chain blossoms on all sides, is it possible that there is certainty in an industrial chain that is divorced from the normal law of development?" By then, I'm afraid it will be more than just overcapacity, waste of resources and endless price wars. "

Qian Jing also reminded that enterprises should consider combined with their own reality, the photovoltaic industry is a capital-intensive industry, and the more upstream, the more capital-intensive, after vertical integration, we should also consider the long-term market conditions, the relationship between supply and demand, and avoid risks.

"lock" polysilicon long sheet

Production expansion builds a bastion of vertical integration of component enterprises. However, as soon as the original cause of the rising price tide, that is, the shortage of polysilicon, is solved, it is obvious that simple production expansion is "slightly sore".

According to industry insiders, polysilicon production capacity has a large amount of investment, complex technical process, long production cycle, and high barriers to entry. "there are almost no enterprise cases of expanding production from downstream to polysilicon links." Statistics from the Silicon Branch of the China Nonferrous Metals Industry Association show that the polysilicon field has formed a competitive pattern dominated by oligarchs such as Poly Xiexin, Yongxiang shares, Xin Special Energy, Xinjiang Daquan, and Oriental Hope, with the production capacity of the five major enterprises accounting for 80%.

Therefore, changing the path to "lock" the director of a large silicon factory ahead of time has become a way for component enterprises to solve the problem.

On September 16th, Donghai Jingao Solar Energy Technology Co., Ltd., a wholly-owned subsidiary of Jingao Technology, reached a strategic cooperation with Suntech Energy, which plans to purchase 97200 tons of primary polysilicon from Suntech Energy and its subsidiaries from October 2020 to December 2025.

Before Jingao, CNC and Longji also "grabbed goods" one after another, signing long-term polysilicon procurement agreements with Xinjiang Daquan and Asian silicon industry respectively, with a procurement capacity of 16700 tons and 124800 tons.

Of course, the long order of polysilicon is not a newly emerging market trend, as early as 2006-2008 and 2010 when the price of polysilicon skyrocketed, the long single model is quite popular. Such as the well-known former giant Suntech's polysilicon single for ten years, but it is this long order that Suntech has paid a painful lesson.

However, unlike the long orders with fixed prices in the past, Jing O, CNC and Longji's polysilicon long orders all adopt the way of monthly bargaining to avoid strong market fluctuations while ensuring the supply of raw materials.

According to the Silicon Industry Branch, as of this week, among the 11 domestic polysilicon enterprises, except for two in Xinjiang and one in Sichuan, all are in full production. According to the production situation and plan of silicon material and wafer production enterprises, it is estimated that the total supply of polysilicon in September is 3.7-38000 tons (including imports), the demand is 39-40000 tons, and there is still a supply gap of 0.1-3000 tons. Therefore, the situation that the market supply is less than the demand has not been reversed, but the increasingly tense upstream and downstream game makes the price of polysilicon weak.

Polysilicon downward transmission, the current price of each link of the industrial chain is becoming stable, but in the face of the end of the year rush to support, the price change will not be too big.

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