In the field of silicon rods and silicon wafers, seize the new opportunities for a leapfrog development in the industry

Recently, the photovoltaic sector has been heating up continuously. In the first trading week of the New Year, the photovoltaic cell sector witnessed a significant increase. In terms of news, according to institutional research information, after a sharp decline in the previous round of the industrial chain, silicon wafers began to experience a slight stabilization last week and even showed signs of a rebound. Data from the Silicon Industry Branch of the China Nonferrous Metals Industry Association shows that as of mid-January, the mainstream price range of domestic monocrystalline M10 silicon wafers was between 3.6 and 3.8 yuan per piece, with the high price rebounding to around 3.9 yuan per piece. The current price adjustment in the photovoltaic industry chain was led by the stabilization and recovery of silicon wafer prices, once again confirming that silicon wafers are a strong link in the photovoltaic industry chain. The demand for silicon wafers and the industry's profit level are expected to continue to rise. At the silicon wafer industry's poker table, a group of new forces are seizing the new opportunities brought by the wave of technological iteration and upgrading, aiming to break the traditional competitive pattern among the major players and "seize" a certain share of the huge photovoltaic market.

Benefiting from technological iterations, new players in the silicon wafer industry are presented with an opportunity to overtake their competitors in a curve

Photovoltaic silicon wafers are the core and important materials for preparing photovoltaic crystalline silicon cells, accounting for approximately 62% to 66% of the cost of the cells. Data from the China Photovoltaic Industry Association shows that in recent years, China's silicon wafer production has been increasing year by year. By the end of 2020, China's silicon wafer production capacity was approximately 240GW, up 38.2% year-on-year, accounting for 97% of the global silicon wafer production capacity and ranking among the world's leading positions.

The technical barriers in the silicon wafer production process are relatively high, especially for monocrystalline silicon wafers. How to increase the yield of finished products, reduce the cutting loss of silicon wafers, increase the unit production, improve the photoelectric conversion efficiency, and lower the attenuation rate are the technical challenges that industry manufacturers have been constantly facing. However, it is precisely because of the high industry entry threshold and high industry concentration (the "duopoly" of Longi and Zhonghuan, with a combined market share of over 50%) that silicon wafer manufacturers have the ability to pass on costs to the downstream. Even when the price of silicon materials is unstable, the industry's gross profit margin can still be maintained at a relatively high level.

Although the duopoly pattern in the silicon wafer industry remains prominent at present, new players in the silicon wafer sector are seizing the opportunity to overtake their rivals by taking a shortcut, thanks to the iterative updates of product technologies. It is reported that as the efficiency of P-type PERC approaches its upper limit, the N-type battery technology route, which features high conversion efficiency, high bifacial ratio, low temperature coefficient and good weak light effect, is becoming the recognized future development direction in the industry. According to the data from the China Photovoltaic Industry Association, P-type silicon wafers still dominate the current market (accounting for approximately 90.4%), but the market share of N-type cells is expected to exceed 70% by 2030. N-type silicon wafers have higher requirements for the purity of silicon material, which provides an opportunity for new players in the silicon wafer industry to join the game.

In addition, the trend of large-sized silicon wafers is another factor contributing to the industry's reshuffling. Yangzhou Baolidi New Energy Co., Ltd. currently has the market size of silicon wafers gradually set in the 210mm/182mm range. According to a report by the China Photovoltaic Industry Association, from 2020 to 2021, the combined proportion of 210mm and 182mm large-sized silicon wafers rapidly increased from 4.5% to 45% It is expected that large-sized solar cells will continue to show a rapid development trend in the future.

Some insiders have pointed out that currently, a large number of furnaces on the market are still of relatively small diameters and need to be updated to produce large-sized silicon wafers. The new players' production capacity is basically capable of manufacturing large silicon wafers, and they do not have the exit costs of outdated production capacity. This provides them with the same new starting line as the old player giants in this wave of large-sized silicon wafer upgrades, and the competitive landscape of silicon wafers may be about to change.

Or sensing the significant business opportunities in the industry's transformation, since 2019, new players such as Shangji, Gaojing, and Shuangliang have all crossed over to enter the photovoltaic silicon wafer market. In terms of production capacity, just two years later, in 2021, up-and-coming companies such as Shangji, Meike, Gaojing, and Shuangliang had all taken advantage of the industry's reshuffling period to develop rapidly and ranked among the top ten in the industry. It can be seen from this that this round of industry reshuffling does indeed provide a good opportunity for new players to develop rapidly and overtake their rivals in a curve.