Green Energy Technology Inc (綠能科技), the nation’s largest solar wafer maker, expects business to bottom out this month following inventory digestion, but order visibility for next quarter remains low, company executives said yesterday.
Demand has stalled since the middle of last month, ahead of an investigation launched early this month by the EU into alleged dumping of solar panels by Chinese manufacturers, Green Energy chief executive Lin Hur-lon (林和龍) told reporters during a media luncheon.
“Shipments from almost all companies came to a halt subsequent to the EU’s probe, which could result in a 5 percent tariff. They are taking a wait-and-see approach,” Lin said.
Lin said he expected the impact from the EU’s investigation would be less severe than a probe by the US, which imposed tariffs of 31 percent to 250 percent on Chinese solar imports after the US Department of Commerce found that Chinese firms sold solar products at prices below cost.
“The stagnation has pushed up inventory over the past one-and-a-half months,” Lin said. “It will take one month for order to be restored in the market. August and September should be the worst period.”
Lin expected demand to recover after its customers in China resume operations after the national holidays beginning on Monday.
“However, order visibility is not clear in the fourth quarter,” Lin said, adding that he expected demand in the first quarter next year to be better than the final quarter of this year.
To stem losses and retain cash, Green Energy cut its wafer capacity to 50 percent last week, from 90 percent.
“We will not join the price war ... We only make goods based on customers’ orders,” Green Energy president Swean Lin (林士源) told reporters.
Green Energy’s loss widened to NT$910 million (US$30.9 million) last quarter from NT$850 million in the first three months, marking the fifth quarterly loss in a row. As of June 30, the solar wafer maker had NT$3.2 billion in cash.
The company is expanding output of solar wafers with ultra-high conversion rate as high as 17.8 percent, which carry a price tag that is about US$0.4 or US$0.5 higher than that of average solar wafers, Lin said.
Output for such ultra-high solar wafers is expected to account for 80 percent of the company’s overall wafer capacity next quarter, up from 60 percent now.
To save on costs, Green Energy is working with two Chinese companies to obtain lower-cost capacities, Lin said.
Green Energy is also tapping into the power plant business which offers better margins. The company formed a joint venture in Thailand and was working on a program to install 8-megawatt thin-film solar systems in the Southeast Asian country, Lin said.
The installation is expected to be completed early next year, he said.
The company is looking for a third party to launch a second program to build power plants overseas, he said.
Shares of Green Energy were flat at NT$21 in Taipei trading yesterday, outperforming the TAIEX, which lost 0.44 percent.