Solar cell maker Motech Industries Inc (茂迪) yesterday said that it is shutting down a solar wafer production line amid a worsening industry slump mainly due to shrinking demand from China.
The change would affect about 160 employees, it said.
China’s new solar policy, which would substantially cut subsidies for solar panel installation and reduce feed-in tariffs, is likely to depress solar demand at a time when the industry is already plagued by oversupply, it said.
A scale-down in solar subsidies would curtail demand by about 40 percent to 31.6 gigawatts in the world’s biggest solar market this year, market researcher TrendForce Corp (集邦科技) forecast.
Its ripple effect is spreading to the solar supply chain, as TrendForce predicts solar prices would fall all the way to the end of the year as the supply glut intensifies.
Several solar product manufacturers have lowered factory usage or launched maintenance programs to weather the downturn, it said.
Motech is “adjusting production capacity in response to rapid market changes,” the Tainan-based company said in a filing with the Taiwan Stock Exchange.
It “intends to transfer wafer production line workers to cell line production,” Motech spokesman James Chen (陳建志) said in the statement, citing adverse impact from China’s new subsidy policy.
The company said it would provide training and development programs to employees to help them adjust to new working conditions.
The Southern Taiwan Science Park Administration said that it learned of the production closure and job relocation affecting about 160 workers from Motech on Friday.
“Motech does not plan to lay off those employees. Rather, they will be relocated to a solar module production line,” said Alice Cheng (鄭秀絨), an executive at the science park administration. “We will closely monitor if Motech cut jobs by circumventing the Labor Standards Act (勞基法).”
Motech shares plunged 9.06 percent to end at NT$15.05 yesterday.
Motech is not the only local solar company feeling the pinch from China’s new policy.
Solar wafer supplier Green Energy Technology Inc (綠能科技) said that slumping demand has taken a toll on its business.
Green Energy slashed its factory utilization to below 50 percent in response to the slowdown and dumping by Chinese rivals, company spokesperson Christine Chen (陳婷婷) said by telephone.
“China’s [solar subsidy] reduction is too big for us to react properly and promptly,” Chen said.
“We think the second quarter will be the worst. Demand should gradually recover in the third quarter as some Chinese competitors become financially unviable and orders flow back [to Taiwan],” Chen said.
“Actually, we have seen new orders trickling in,” he added.
Factory utilization should recover to about 70 percent next quarter, Green Energy said.
In a further effort to solve the long-standing problem of a supply glut, Green Energy is looking to form an alliance with local solar wafer makers to integrate their capacities and resources, Chen said.
The company is seeking to secure government funding to assist in the development of the alliance, she said.
Green Energy lost NT$183 million (US$6.02 million) in the first quarter. It posted losses of NT$592 million last year.
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