Thin-film Development in Asia

Thin-film Development in Asia

Manufacturers of amorphous technologies account for 60% of the entire thin-film industry. Over one third of these are a-Si producers located in Asia.

SEOUL, SOUTH KOREA (January 4, 2010) - One of the main reasons for the high number of Asian companies in the thin-film industry is due to their experience in the coating process for mass production in the semiconductor industry, according to “Thin-Film Industry Guidebook 2009”, a study published by EuPD Research. This experience is especially useful in the related flat screen and storage media industries, for example. The coating technique used for LCD displays and solar cells is similar to a large extent. The skills that companies have gained are, therefore, shifted to the photovoltaic industry. Due to past slumps in the flat screen segment, large conglomerates have also been active in the field of photovoltaics. These industries are predominately located in Taiwan and Japan. In particular, Taiwan may be able to establish itself as a production site for the thin-film segment. Thin-film development in Japan has already been processed to a greater extent--after all, it is known for its promotion of solar-generated electricity. The island is, therefore, home to a significant number of technological leaders. Besides Japan and Taiwan, a thin-film cluster is developing in northeast China, which is also not to be underestimated. A further driver of Asian development may be a new governmental incentive program for photovoltaics in Japan and the first steps in the promotion of photovoltaics for the economic powerhouse, China. A new bill passed at the beginning of 2009 could stimulate the industry further. In fact, open space installations--the core segment of the thin-film industry--still do not profit from a promotion scheme. However, incentive programs are focused on public buildings, schools, hospitals and installations of more than 50 kW--segments in which the technology actually plays a role. In the past, only Japan was a noteworthy sales alternative to Europe. However, since the feed-in tariff expired in 2005, the market lost a considerable amount of significance. For Asian manufacturers, the developments in Japan and China open up further domestic sales markets on the Asian continent. Due to the fact that Asian photovoltaic markets are not yet well-developed, Asian photovoltaic companies have been heavily export-orientated in the past. They mainly focus on European growth markets. If these markets slow down or collapse, EuPD Research explains, as happened in Spain after the capping of the market, this will have significant impact on the Asian module and cell producers as well as for the European and North American producers.

Thin Film: Chances & Challenges in 2010

According to EuPD Research, many experts assume that the thin-film segment has been much more negatively affected by the financial crisis than the mono and polycrystalline segments. In contrast to crystalline market players who have long been active in the market, thin-film companies are often young start-ups with relatively low capitalization. This is especially seen in the large share of Chinese companies, for example. Theoretically, thin-film manufacturers have higher potential for reducing production costs. Apart from a few thin-film companies which have established mass production, the majority of market participants are not able to play off the cost advantages within their production. Against the background of global supply surplus, crystalline producers were forced to offer their products below the margins in order to maintain liquidity in the short term, this would increase the pressure on thin-film start-ups.

As a result, companies with technological know-how, established distribution channels and secure capitalization have the best chances of survival. However, only a few thin-film and crystalline companies fulfill these conditions. Further financial pressure might result from the fact that banks prefer to invest in more approved technologies, especially during an economic crisis. However, this is not the case with a few younger thin-film technologies such as organic, for example. Taking into consideration the banks’ restrictive loan allocation rules, the significantly higher construction costs for thin-film facilities in comparison to mono and polycrystalline facilities is another major disadvantage. 

EuPD Research predicts the consolidation process within the thin-film industry should especially call players outside of the thin-film industry into action, allowing them the option of picking and choosing. Besides players outside of the thin-film industry, established market participants from other photovoltaic technologies might also become involved in thin film. Due to the economic crisis and the global supply surplus, the gap between established companies and young market players can be expected to grow even further in the future, concludes EuPD Research. All in all, 2010 promises to be at least as interesting as 2009.

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Source: EXPO Solar

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