Electrical Equipment / Components & Telecoms

The international trade market grew significantly. With the listed companies in the photovoltaic industry successively disclosing their semi annual reports, the global module shipments in the first half of this year also surfaced, with the top four having been released, and Jinko Energy ranked first with shipments of about 18.21GW. The gap between Trina Solar and Longji Green Energy is very small, and Jingao Technology ranks fourth.

In 2020 and 2021, Longji Green Energy's shipment volume kept the first place in a row. However, in the first quarter of this year, Jinko Energy returned to the first place, and Longji dropped to the fourth place. At that time, Trina Solar ranked second and third in the competition with Jingao Technology. In the first half of the year, the shipment seats of components were rearranged again, and the shipments of Jinko, Trina Solar and Longji exceeded 18GW, while that of Jingao dropped to the fourth place.

A common trend revealed in the semi annual reports of the four component manufacturers is that the expansion of industrial integration capacity is continuing, and all manufacturers have set huge capacity targets. Jinko even said frankly that the vertical integration ability is the necessary ability for photovoltaic enterprises to participate in future competition, which seems to draw a conclusion for the dispute over whether the industry integration or specialization path is better. In addition, while promoting the integrated layout, front-line manufacturers are also simultaneously expanding N-type capacity. It can be expected that the proportion of N-type product shipments will steadily increase.

Great contribution to overseas market

One common feature of the top four manufacturers is that they have contributed a large share of the overseas market. For example, in the first half of the year, overseas shipments of JA technology components accounted for about 67%. The company said that while stabilizing the major photovoltaic markets in China, Europe, the United States, Japan, etc., it is actively laying out emerging markets in Southeast Asia, Australia, Central America, South America and the Middle East.

At the performance briefing, Jingao said that from the third quarter, the delivery price of overseas components was gradually rising. Recently, the price of newly signed distribution orders has an upward trend, and large projects, especially long-term projects, will have discussions with customers. In terms of regional demand, foreign countries are still slightly stronger than domestic ones. For example, some traditional mature markets have strong demand and relatively high price acceptance.

In the first half of the year, the component shipping destinations of Jinko Energy showed that the European market accounted for the highest proportion, and China, the Asia Pacific region and emerging markets all made relatively high contributions. In the European market, the company's N-type TigerNeo series component products achieved a large number of orders and a high premium level; In the Chinese market, the company focuses on the expansion and development of the distributed market while laying out large base projects to achieve rapid growth in shipments; In Latin America, India and other markets, the company seized the opportunity of market rotation to achieve rapid growth through leading layout.

An important variable in the overseas market this year is the United States. Since last June, the United States has issued WRO (temporary detention order), extended 201 tariffs on solar cells and module products, and conducted anti circumvention investigations on photovoltaic products in four Southeast Asian countries; In addition, India has also raised tariffs on imported components and battery products since the second quarter of this year to reduce imports and promote local manufacturing.

Longji Lvneng said that in the first half of the year, the US market was affected by WRO, anti circumvention investigation, etc., and the cost of demurrage storage increased significantly; In response to the change, the company shifted its sales focus to other important markets such as Europe. With its long-term accumulation of product services, brand awareness and channel layout, the company has maintained a good competitiveness, and its overseas business is basically stable.

Trina Solar said at the performance conference that the company's main challenges in the US market are supply chain and silicon material traceability; In the second half of 2022, the company's shipments in the U.S. market will return to normal, with a substantial increase compared with the first half of the month. It is expected that the annual output will be more than 2GW; It is estimated that the normal market share of the company in the US market can be restored in 2023.

As for the sustainability of overseas demand, due to the concentration of holidays in the fourth quarter and other factors, the market is worried about the performance of the European market in the traditional off-season. In this regard, Jingao believes that the possibility of a cold winter in Europe this year is very high. There will be a shortage of natural gas supply and high electricity prices. At present, the demand in Europe in the fourth quarter of this year will be better than that in previous years.

Simultaneous implementation of integration and N-type expansion

In the semi annual report, many manufacturers mentioned the forecast of global module demand this year and next, and PV still maintained a rapid growth. According to the judgment of Trina Solar, the new installed capacity will be about 280~300GW in 2022, and the demand for photovoltaic products in Europe will increase greatly due to the Russia Ukraine war; It is estimated that the newly installed capacity will be 380~400GW in 2023, with a growth rate of 30%.

Jingao said that from the third-party data, the industry demand next year will be about 330GW to 340GW, but the company believes that there is still the possibility of upward correction, and it is expected that the possibility is large between 350-400GW, and hopes that the market share will keep growing steadily.

In the face of potential market demand, integrated capacity layout is becoming the choice of more and more manufacturers. Jinko Energy clearly stated that vertical integration capability is an essential capability for photovoltaic enterprises to participate in future competition. The company's 16GW large size TOPCon battery capacity put into production at the beginning of the year has been fully produced in the second quarter, the second phase of Hefei has put 8GW battery capacity into production, and the second phase of Jianshan is also under construction.

In the context of the integration of first-line photovoltaic manufacturers, N-type capacity is another highlight of this layout. In fact, in terms of the choice of the next generation battery technology, except Longji, the other three companies unanimously chose TOPCon.

According to the statement of Jing'ao Technology, TOPCon is relatively mature at present, and the company's R&D investment is large. In addition, the heterojunction is likely to be mass produced in 2 to 3 years. The company's heterojunction pilot line has also been put into production, and the perovskite, IBC and other technologies have always had technical reserves. The situation of Trina Solar is similar. The company said that TOPCon is the best technology option for the current period after comprehensive comparison.

Jingao said that by the end of 2023, the company plans to have a capacity of 27GW of N-type batteries. Combined with specific production time nodes and market demand for new products, it is preliminarily estimated that N-type components will account for about 1/3 of the 2023 shipment target. In addition, the N-type product is initially expected to have a premium of about 1 cent compared with the existing P-type product, and the cost is slightly higher. The profitability depends on the industry trend.

Faced with the demand for integration and N-type expansion, front-line enterprises generally increased their refinancing efforts. At the same time of disclosing the semi annual report, Jing'ao Technology released the convertible bond issuance plan, and proposed to raise no more than 10 billion yuan, which will be used for Baotou 20GW crystal pulling and slicing project, Qujing 10GW high-efficiency battery and 5GW high-efficiency component project, and Yangzhou 10GW high-efficiency battery project. The company said that this would help to establish a leading position in the industrialization development of large-scale N-type products.