Shortage of Traditional Wafers Offers Opportunity for Kerfless Producers
By Tyler Ogden, Lux Research
Green Energy Technologies – a mid-sized wafer producer – has warned of a looming wafer shortage as module manufacturers expand their capacity while wafer suppliers are not keeping pace. In 2015, tier-one wafer suppliers GCL-Poly Energy Holdings and Longi Silicon Materials have expanded their wafer production by 1 GW and 500 MW, respectively. This is in light of rising demand from emerging markets such as India and short-term rushes to complete projects in the U.S. prior to the Investment Tax Credit expiration in 2017. Others are also warning of the potential for a shortfall in the supply of multicrystalline silicon (mc-Si) wafers. Meanwhile, the prices of multi- and monocrystalline silicon (c-Si) are converging, with c-Si prices dropping and mc-Si prices rising.
The drop in c-Si wafer prices will contribute to the continued deployment of high-efficiency modules as cell and module manufacturers will see a drop in the cost of goods. Module manufacturers then have two options: to offer high-efficiency products at a lower price, or continue to develop efficiency improvements on the cell-level, offering their modules at the same price but with greater conversion efficiency. The latter is more likely, as Longi and Sunrise Global have announced agreements with metallization paste suppliers to continue pursuing cell efficiency improvements. Efficiency gains will be central in offering high capacity modules to reduce installed system costs. Demand for high-efficiency, monocrystalline wafers will increase as manufacturers pursue higher efficiencies and costs continue to drop.
Missing from this conversation is a discussion of how the supply dynamics pose opportunities for upstream technologies. The rise in mc-Si prices and the possible undersupply of wafers present a significant opportunity to companies pursuing kerfless wafer production. 1366 Technologies recently announced plans to construct a 3 GW mc-Si wafer facility. The company’s kerfless Direct Wafer process would allow the company to undercut the rising prices of mc-Si wafers and rapidly gain market share. However, the initial 250 MW phase isn’t slated for completion by 2017, when global demand will drop due to expiring policies in the U.S. and high market penetration in Japan. Despite the likely responsive drop in mc-Si wafer prices at that time, 1366 Technologies is already positioned to offer its wafers in high-efficiency, low-cost mc-Si modules, as seen in their achievement of a 19.1% cell jointly developed by Hanwha Q-Cells. Either way, there is a huge opportunity for 1366 Technologies to become a key kerfless mc-Si wafer supplier by 2020.
Alternatively, companies pursuing kerfless c-Si wafer such as NexWafe, Solexel, and Crystal Solar pose more of a threat to traditional wafer suppliers due to dropping prices of c-Si wafers. However, unlike 1366 Technologies, these companies are producing wafers at thicknesses significantly below those used in existing cell manufacturing lines. Thinner wafers require new process equipment that module manufacturers are unlikely to adopt. Only Crystal Solar is producing wafers at currently-used thicknesses of 180 µm. Thinner wafers will only come after a kerfless process is proven at scale by first targeting easy adoption by producing wafers at standard thickness. Material clients could gain by developing partnerships with companies that are pursuing rapid adoption by the production of 180 µm wafers – but be aware that it is a long-term play.
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December 16, 2015