Is Production Expansion on Hold? Analyzing May's Solar Cell Scheduled Production and Market Demand   

In April, solar cell production hit 61.88 GW, up 9.07% MoM and up 34.52% YoY. N-type cells led with 44.05GW, making up 71.18% of total output. Demand for topcon cells exceeded 42GW, reflecting strong market dynamics. Inventory was efficiently managed before the Labour Day holiday, showing effective supply chain control. In contrast, P-type cells faced challenges in April with a production of 17.83GW and weak demand, resulting in significant inventory buildup. Demand for P-type cells is anticipated to decline further in May.
For May, the scheduled production of PV cells is set at 64.12 GW, up 3.61% MoM. N-type cells are scheduled at 48.53 GW, making up over 75% of the total. Within the N-type, Topcon cells represent more than 96% of production.

SMM research indicates that over 50 domestic manufacturers now produce Topcon cells, with a combined nominal capacity exceeding 650 GW. Most have initiated production in Q2. In May, the capacity utilization rate for Topcon cells exceeded 85%, though around 10% remained idle due to insufficient orders, leaving some lines inactive. Mainstream manufacturers operated at full capacity, while others were adjusting and ramping up.
There's a significant shift in Topcon cell sizes, with the 182 mm format being replaced by the larger 183.75 mm cells. Additionally, production of 210 mm rectangular cells is expanding rapidly and is poised to outpace 210 mm square cells. Leading integrated manufacturers like Trina Solar, Jinko Solar, and Tongwei are driving this change, urging upstream cell makers to adapt and modify dimensions accordingly.
This year, N-type and particularly Topcon PV modules have become the mainstream market choice due to their cost-effectiveness. However, overcapacity has intensified competition, causing financial losses in both upstream and downstream sectors. Despite high sales volumes, profits remain low.
April's domestic PV installation data showed only a marginal MoM increase, with slow progress in centralized projects. Fluctuating overseas demand, influenced by policy changes, has cooled the enthusiasm of downstream distributors and power companies for purchases.
Post-Labour Day holiday, procurement and delivery of PV modules resumed, with prices for new N-type PV module orders trending downward. SMM research suggests that May's scheduled production for N-type PV modules might be adjusted down to about 41.8 GW, with demand for Topcon batteries near 40 GW. Integrated PV module factories currently hold substantial inventories of silicon wafer and cell materials, leading to weaker cell orders in May compared to April.
As cell production grows, Topcon cells are experiencing inventory buildup, which has slowed the mass production at newly established specialized cell factories. Additionally, several manufacturers have delayed or canceled their expansion plans from last year. With the industry pausing expansion, the supply-demand situation for Topcon cells has reached a more balanced state for the year. As the market share of PERC cells declines, the inventory risks associated with Topcon cells are expected to be effectively managed.