The upturn in capacity expansion is being stimulated by the PV manufacturing shakeout, as uncompetitive production lines are either being idled, retired or removed following corporate failures.
Finlay Colville , Vice President at NPD Solarbuzz, explained: “Capacity taken offline is just one reason why PV equipment suppliers are planning for future growth. Tier 1 manufacturers are also choosing to run existing production lines at reduced utilization rates during 2012, while increasing the level of outsourced wafers and cells. This is helping to restore a healthier supply-demand balance to the PV industry, thereby removing the underlying deterrent holding back the release of new CapEx.”
PV equipment revenues (covering c-Si ingot-to-module and thin-film) for Q1’12 fell to $1.75 billion, a 10-quarter low, down 27% Q/Q and 51% Y/Y. However, the CapEx downturn is forecast to finally bottom-out during Q2’12, following six consecutive quarters of negative growth.
The rebound in spending will be characterized first by new order intake driven by a select group of tier 1 manufacturers. Positive Q/Q growth in new orders will emerge in 2H’12, as capacity expansion plans are revised to address market-share aspirations for 2013 and beyond. This will be reflected in PV book-to-bill ratios that will return above parity during 2H’12.
The severity of the cyclic spending downturn is having a dramatic impact on PV equipment suppliers in 2012. Most leading equipment suppliers are now projected to see Y/Y PV-specific revenue declines in the 60-80% range.
Suppliers that already serve market segments adjacent to PV (semi, display, and LED) have experience in how to manage capital equipment spending cyclicality, so they will be best positioned to cope with the PV downturn during 2012. However, equipment suppliers that had aligned their core business activities to focus mainly on the PV industry will be particularly affected, with further workforce adjustments and negative operating margins likely.
“Supplier rankings are undergoing a transition phase in 2012, with significantly less revenues on