Gintech Energy Corp (昱晶), a Taiwanese solar cell maker facing export restrictions following the introduction of US tariffs, is looking for opportunities to merge with competitors, clients or suppliers amid excess industry capacity.
Overcapacity is making it difficult for smaller companies to compete on pricing and the quality of their products, Taipei-based Gintech chief financial officer Pan Leilei (潘蕾蕾) said in an interview on Friday last week.
“We need presence in supply chains besides our core operations in solar cells,” Pan said.
Gintech’s domestic competitors — Motech Industries Inc (茂迪) and Neo Solar Power Corp (新日光) — have already struck deals of their own. Motech announced in December last year that it would buy Topcell Solar International Co (聯景光電) for NT$2.06 billion (US$65.3 million) to cut costs and boost production scale. In 2013, Neo Solar acquired DelSolar (旺能), a unit of Delta Electronics (台達電).
New US tariffs went into effect on Jan. 21 for solar panels imported from China and Taiwan. Ruling that US solar firms were being harmed by the imported products, the US International Trade Commission imposed antidumping duties ranging from 11.45 percent to 27.55 percent on Taiwanese producers, the US Department of Commerce said.
Gintech shares fell 0.7 percent to close at NT$21.50 in Taipei trading yesterday. The stock has declined 7.4 percent this year, compared with the 1.2 percent gain in the benchmark TAIEX.
Pan said Gintech’s plants were running at full capacity in December last year and last month, after the company reduced plant utilization in August and September last year, even as the US duties came into effect.
“High industry production utilization rates in the fourth quarter [of last year] may have reflected ongoing demand in China and shipments bound for the US before the final trade ruling announced in January,” London-based Bloomberg Intelligence analyst James Evans said
Gintech is weighing relocating some production facilities outside of Taiwan, potentially to Southeast Asia, Pan said in response to the Department of Commerce ruling.
The move could allow continued tariff-free access to the US market, Evans said, and follows moves by Solartech Energy Corp (昇陽科技) and Tainergy Tech Co (太極能源科技) to Malaysia and Vietnam.
Demand for solar panels is expected to be from 50 to 55 gigawatts this year, compared with 40 to 45 gigawatts last year, Pan said, with the bright spots being the US and China. Gintech will not be expanding its solar cell production capacity, as snow season in Japan and the US are expected to keep product prices under pressure in the first quarter, Pan said.
Weakening global demand hurt solar component prices, bringing module prices to their lowest in more than five years on weak demand, market researcher PVInsights reported on Wednesday last week.
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