Solar cell maker Motech Industries Inc (茂迪) yesterday said it signed a solar module manufacturing venture agreement with solar paste maker Gigasolar Materials Corp (碩禾) to jointly source business opportunities in the solar industry supply chain.
The strategic alliance comes as solar companies grapple with prolonged oversupply after a major merger plan was unveiled on Monday by local solar cell makers Neo Solar Power Energy Corp (新日光能源), Gintech Energy Corp (昱晶能源) and Solartech Energy Corp (昇陽光電).
“The solar industry has been plagued by a supply glut for the past six to seven years,” Motech chairman Chang Ping-heng (張秉衡) told reporters.
“The industry has to consolidate existing players [to solve the problem]. The three-way merger is the first step,” he added.
However, mergers can only solve part of the problem, Chang said, adding that the industry needs a shakeup to root out overcapacity, Wealth Monthly (財訊) magazine reported yesterday.
Local solar cell makers own a total installed capacity of 13 gigawatts (GW), which greatly exceeds the domestic market demand of 3GW at best, Chang said.
Expanding overseas offers one solution for local firms, he said.
Talking about Motech’s venture with Gigasolar, Chang said the new entity would start operations in the next quarter, with an initial capacity of between 200 megawatts (MW) and 250MW per year.
The installed capacity could be expanded to 1GW to cope with growing customer demand, Chang said.
In the initial phase, Motech plans to invest NT$180 million (US$5.96 million) in the new company, to be named Taiwan Solar Module Manufacturing Co (TSMMC, 台灣太陽能模組製造), which would entitle it to a 90 percent share of the venture, a company statement submitted to the Taiwan Stock Exchange said yesterday.
Gigasolar will own a 10 percent stake in TSMMC.
The new solar module manufacturer’s share capital will total NT$1 billion, the statement said.
Chang said one more partner is to join TSMMC later.
TSMMC will also seek a funds injection from the National Development Fund, as Neo Solar planned.
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