Simon Tsuo (左元准), chairman and chief executive officer of Motech Industrial Inc (茂迪), said yesterday that mergers and acquisitions were expected in the solar energy sector because more companies were entering the market with similar products.
“At some point you have too many companies in China and Taiwan — as well as the rest of the world — manufacturing the same thing,” he said.
“With the herd mentality in the last couple of years, there’s bound to be a shakeout in the industry, with small players eliminated or bought out and left with all but the really big players,” Tsuo told a solar energy forum in Taipei.
Tsuo said the mergers and acquisitions were likely in the near future.
Tainan-based Motech ranked No. 1 in Taiwan last year for crystalline silicon solar cell manufacturing with 265 megawatt (MW) capacity, with Gintech Energy Corp (昱晶能源) and E-ton Solar Tech Co (益通光能) coming in second and third with 180MW and 115MW in production respectively, a Credit Suisse report showed.
The firm is the sixth-largest solar cell manufacturer in the world.
“This year, we have a production forecast of 590MW — almost double what we produced last year — because our investments in AE Polysilicon Corp in the US and in a manufacturing plant in China are helping to add to our bottom line,” Tsuo said.
The solar industry has been suffering from a glut of solar cells since October last year, a problem that Tsuo said would take time to digest.
According to research by market intelligence firm iSuppli Corp, Europe produced the most solar cells last year at 27.4 percent, followed by China at 25.8 percent, Japan at 16.2 percent and the US at 13.7 percent.
The rest of the world produced 16.9 percent of solar cells.
“But we are still a long way from actually using solar energy in our day-to-day lives, as China’s solar energy usage is only 1.3 percent of its entire energy consumption, while Japan and the US are not much more advanced at only 4.1 percent and 6 percent of their respective total energy use,” Tsuo said.
He hoped that as people around the world came to understand the importance of renewable energy, they would embrace the technology sooner rather than later.
“I hope deputy director-general Li Junfeng [李俊峰] of the National Development and Reform Commission in China’s Energy Research Institute is wrong about China fully adopting solar energy by 2050 because that is simply too far away,” Tsuo said.
Founded in 1999, Motech operated as a simple solar cell production company.
“Buying wafers, making solar cells, then selling solar cells was what we did at the time, when the industry was in its infancy,” Tsuo said. “With 80 percent of our cost based on wafer prices, we quickly learned that this was not the way to do business in the long term,” Tsuo said.
Since 2004, the firm has been investing in the US and China and diversifying its portfolio, he said.
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