Topcon solar cell demand rises, PV cell capacity remains low into Q2

In March, N-type Topcon solar cell output surpassed 37 GW, making up about 66.5% of total production. Downstream demand matched this at 35 GW, indicating rising supply and demand. Manufacturers have improved yield and efficiency, making Topcon cells the new market norm over PERC batteries. A faster decline in PERC production and demand is expected, with the Q2 likely marking the year's lowest point for effective photovoltaic cell capacity.
N-type Topcon demand expected to rise, modest supply increase in April
In early March, a surge in PV module scheduled production prompted a sharp increase in Topcon cell procurement. However, cell manufacturers were still scaling up post-Spring Festival, causing supply to lag behind demand and rapidly depleting February's battery stock, leading to early March delivery strains. Later in the month, PV module pick-up rates slowed due to high silicon wafer stocks and falling prices, sparking some market concern. To manage inventories, some cell factories hesitated to ramp up production. Yet, with PV module scheduled production in April expected to rise and a growing share of N-type, and Topcon cell demand is set to persist.
Inventory pressure for P-type cells rose in March, with production line upgrades anticipated in April
March saw high inventory pressure for 210 size P-type cells and demand fatigue. A shift to Topcon for 210 and 210R sizes is expected. With limited Topcon 210 large-format cell capacity, manufacturers are expanding production for anticipated demand. New Topcon 210 and 210R capacities are expected in Q2, but complexities in manufacturing may delay effective volume availability until Q3.
For P-type 182 cells, March experienced a supply surge and demand weakening, resulting in significant inventory. In April, several factories will start upgrading lines from PERC to Topcon, with these modifications needing time to finish, which means their contribution to Topcon capacity growth in the Q2 will be limited.
Upstream cell inventories prompt industry-wide price cuts in Q2, reducing profitability and slowing new production line additions
N-type silicon wafer scheduled production reached 49 GW in March, leading to a 10 GW inventory buildup. High output in prior months created significant stockpiles, and with prices falling, end users became cautious. PV module manufacturers pressured for cell price cuts late in the month. Outsourced PV module manufacturing increased, but external cell orders decreased, accelerating the decline in cell prices and compressing profits. This led manufacturers to reconsider and delay Q2 expansion plans, particularly for Topcon capacity.
Battery production upgrades and new capacity to peak in Q3, with Q2 upgrades causing varied supply and demand, resulting in a tight balance for Topcon cells.