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Digitimes Insight: PV module material supply hit by quake
Chihheng Liang, DIGITIMES Research, Taipei [Thursday 17 March 2011]

Demand in the PV market is continuing to flourish into the first half of 2011, and as shortages of materials continue, the effect of the March 11 earthquake on the polysilicon materials sector is being closely watched. The four Japan-based firms producing polysilicon materials mainly utilize their capacity to supply semiconductors, with the exception of M. Setek. Moreover, Japan only accounts for a small proportion of global capacity for solar-grade polysilicon materials. For all these reasons, the earthquake will have only a limited impact on global supplies of PV materials.

If we look at Japan-based manufacturers' position as global leaders in PV module materials, it is clear that if the regional electricity supply restrictions continue, the existing problem of thinly stretched supplies of module peripheral materials is only likely to be exacerbated.

Japan plays an important role in polysilicon upstream materials. Of the four polysilicon manufacturers located in Japan, only a portion of the capacity of Tokuyama and the AUO-subsidiary M. Setek is concentrated on the PV market, with the remainder focused on polysilicon for semiconductor use.

Tokuyama's polysilicon factory is located in Yamaguchi Prefecture, where the impact of the earthquake has been limited. However, M. Setek's facilities are located in the heart of the disaster area, and have therefore been more seriously affected. Some 3,000 tons of M. Setek's current capacity of 7,000 tons has an actual effect on polysilicon supplies, while the remaining 4,000 tons is currently engaged in trial production. The impact on PV upstream materials supplies will therefore be small.

Digitimes Research estimates that global supplies of polysilicon for PV use will total 160,000-170,000 tons in 2011. Although there is currently a severe shortfall in raw materials supplies for PV polysilicon, the earthquake in Japan is likely to have only a limited effect on this issue.

PV polysilicon wafer capacity located within Japan totaled some 1,360MWp in 2010, accounting for just 5% of global capacity. Besides M. Setek, all the relevant factories are located in the Kansai area, where the impact of the earthquake has been limited. Consequently, only M. Setek's 120MW crystal cutting production capacity has been affected, and this is not likely to have an impact upon global supplies of PV silicon wafers.

Japan has a significant influence on the key components and materials sectors globally, while the PV module materials sector is led by firms hailing from Europe, North America and Japan.

Rapid growth in the PV market during 2010 resulted in insufficient supplies of PV-grade EVA for PV module encapsulation, and a large number of Japan-based manufacturers subsequently switched their conventional EVA capacity over to the production of PV-grade EVA. The main Japan-based manufacturers in this sector are Mitsui Chemicals and Sumitomo Chemical. Mitsui Chemicals has a PV EVA production capacity of 20,000 tons, while Sumitomo Chemical operates an EVA production line in Chiba Prefecture with a capacity of 30,000 tons. Global demand for PV-grade EVA is approximately 170,000 tons, and so shortages of PV-grade EVA will continue as long as new capacity is limited. If regional electricity rationing continues, PV EVA supplies may well become even more thinly stretched.

Japan's Hitachi Cable occupies a leading position in the PV ribbon sector. The firm's main factory sites are located in Ibaraki Prefecture, part of the main disaster area. This will put further pressure on the already limited supply of PV ribbons.

Japan-based polysilicon suppliers

Company

Plant location in Japan

Capacity (ton)

Product line

Tokuyama

Yamaguchi

8,200

Semiconductor, PV

Mitsubishi Materials

Mie

4,300

Semiconductor

Osaka Titanium

Hyogo

1,400

Semiconductor

M. Setek

Fukushima, Miyagi

7,000

PV

Source: Digitimes Research, March 2011

Japan-based solar wafer suppliers

Company

Plant location in Japan

Capacity (MWp)

Space Energy Corp

Nagano

210

Kyocera

Shiga

400

Sumco

Saga

630

M. Setek

Fukushima, Miyagi

120

Source: Digitimes Research, March 2011

Japan-based PV module material suppliers

Material

Company

Plant location

Capacity (ton)

EVA

Mitsui Chemicals

Aichi

20,000

Ibaraki

5,200

Bridgestone

Shizuoka

50,000

Gifu

28,000

Sumitomo Chemical

Chiba

30,000

PV ribbon

Hitachi Cable

Ibaraki

700

Source: Digitimes Research, March 2011

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