On June 25, the latest news from the single-chip faucet Longji official website showed that after the mid-month price adjustment, the price of low-resistance monocrystalline silicon wafers with a thickness of 180μm was reduced again. The domestic price dropped to 3.35 yuan, and the overseas price dropped to 0.445 dollars, a drop of 8.22. %.
On the same day, Zhonghuan, which ranked second in the country in terms of shipments, also announced price cuts. The monocrystalline silicon wafers of the same specification fell to 3.32 yuan per piece, and the low-resistance monocrystalline silicon wafers were 3.37 yuan per piece, 160 μm thick conventional monocrystalline silicon. The price of the film is 3.18 yuan per piece, and the low resistance monocrystalline silicon wafer is 3.23 yuan per piece.
After the downward adjustment, compared with the current domestic average price of 2.38 yuan for the same specifications of polycrystalline silicon wafers, the price difference of single polycrystalline silicon wafers has further shrunk to between 0.9 and 1.1 yuan, which is the ninth time that Longji has lowered the price of monocrystalline silicon wafers. The price cuts of half a month ago even reached the biggest drop of 14.1%.
In the past two years, the development of monocrystalline silicon wafers has been rapid, the production capacity is in short supply, and the price of silicon wafers continues to remain high. The price difference between monocrystalline silicon wafers and high-efficiency polycrystalline silicon wafers of the same specification has once expanded to 2 yuan/piece. However, Although monocrystalline silicon wafers have the advantage of high efficiency, their market share is far behind polycrystalline technology due to their complicated technology and high price, and limited manufacturers.
However, in the opinion of the industry, this situation may be reversed. Jason Tsai, the strategic consulting department of Gaith Consulting, pointed out to the analysts of Time Weekly that the enthusiasm of Longji and Central price reduction measures actually exceeded expectations, accompanied by monocrystalline silicon wafers. The price is lower, the competition of single polycrystalline enters the stage of white heat, or will be won in the third quarter of this year, and polycrystalline, second-line single crystal manufacturers are facing the crisis of shuffling out.
The relevant person of the Longji Dong secret office responded to an interview with the Times Weekly reporter, 'We expect that this year's single crystal will account for 50%-60% of the market share'.
It should be noted that even if it benefits from the strong rise of single crystal circuits, Longji has been able to become a global single-chip leader in the past two years, but what impact will the ninth consecutive declines bring to Longji? Under the volume, will Longji, which has proposed a three-year expansion plan from the beginning of the year, still have overcapacity? After the reversal of the single polycrystalline market, what impact will it have on the silicon material and silicon wafer industry in the upstream PV industry?
Active price adjustment and capacity expansion
Looking at Longji's official website, it can be seen that in the past six months, Longji has lowered the price of single crystal silicon wafers with a thickness of 180μm every month, and in February and June, it has been continuously lowered twice. The price also dropped from 5.2 yuan on January 24 to 3.35 yuan after the price adjustment.
For this price adjustment, Longji related people told Time Weekly that on the one hand, in the current market environment, the domestic PV market is indeed more pressured. Although from the global market point of view, the global market is expected to increase in size this year, overseas market The increase in sales can roughly cover the decline in the domestic market, but the domestic market still needs a period of transition in a short period of time; on the other hand, under the price cuts of polysilicon wafers, Longji downgrades the price of monocrystalline silicon wafers to follow up. The price/performance ratio with the polysilicon film.
In the industry, Longji and Central's aggressive pricing strategy may be more of a measure taken in response to a sudden change in the market environment. It is reported that in January 2018, Longji shares issued a single The development plan of the crystal wafer business 2018-2020 shows that the production capacity of monocrystalline silicon wafers will reach 28GW by the end of 2018 and reach 45GW by the end of 2020.
In terms of the expansion plan, according to 2017 global PV new installed capacity of 102GW and domestic new installed capacity of 53GW, and PV Infolink, the 2017 single crystal market share is 36% globally, and domestic is 27%. In the single crystal market, the market capacity of single crystal in 2017 was 27.54GW globally and 19.08GW in China. In contrast, Longji's 28GW production capacity in 2017 has exceeded the global market growth last year.
In fact, Longji's expansion plan has been 'arrowed on the line, have to send'. From Longji's 2017 financial report, it can be seen that Long has been in charge of monocrystalline silicon materials in Yinchuan, Baoshan, and Malaysia based on 2017. The production capacity of silicon wafers was released. As of the statistical period, Longji has achieved 15GW in 2017, while the capacity under construction has reached 16GW.
In addition, the announcement of Longji in the first half of 2018 can be learned that Longji on February 6th, April 3rd and May 23rd, respectively, with OCI and its subsidiaries OCIM, Xinjiang Daquan and Yongxiang shares, Yongxiang Polysilicon Tongwei High-Purity Silicon signed three long-term orders for silicon materials that lasted until 2020, amounting to US$1.023 billion (6.8 billion yuan), 4.946 billion yuan and 6.996 billion yuan, respectively. The latter two accounted for 2017 operating costs respectively. 45% and 63%, the total silicon material reached 159,200 tons, the amount reached 18.792 billion yuan, exceeding the peak revenue of 16.362 billion yuan last year.
However, under the capacity increase and the market has not expanded greatly, Jason Tsai of the above-mentioned Gaxi Consulting Strategy Consulting Department analyzed the Times Weekly reporter. The expansion of Longji originated from the expectation of the market, that is, the polycrystal was eliminated in 2020. Single crystals are not enough to support the overall market demand, so this year Longji must use low gross profit to exchange the volume of goods, so that the expansion plan goes smoothly.
However, the price-changing action will inevitably lead to a sharp contraction in profit margins. In the past 2017, Longji has paid more attention to the industry with more than 30% of its high gross profit. Longji also told the Times Weekly that the gross profit margin will be affected this year. The impact of price cuts. In the opinion of Gaith Consulting analysts, Longji Central has actually prepared for reducing gross profit margin. The gross profit margin will definitely fall below 30% this year, and is expected to be in the range of 10%-20%. Based on market competition, low profit and loss will be their main guiding strategy this year.
Under the volume strategy, it will inevitably alleviate the pressure on production capacity caused by single crystal expansion. According to industry analysts, through the price adjustment strategy, if the market share of domestic single crystals reaches 60% this year, Longji’s 28GW capacity will not necessarily be surplus. .
Longji related people told the Times Weekly reporter that the proportion of single crystals in the domestic front runners accounted for 80%, and the poverty alleviation projects requiring high returns were actually more suitable for single crystal recording. 'Therefore, the projects under construction announced by Longji are still advancing normally. This year, the production capacity of monocrystalline silicon wafers is likely to achieve the goal of 28GW, of which Baoshan project progress is relatively fast.
Single polycrystalline market share or reversal
It is worth noting that when the single-crystal leading enterprises make a big price war, the competition of single polycrystals will be white-hot. However, there are not many price-cutting enterprises that have to cut the price space or even lose money, or they will be struggling to fight. The battle for crystal market share may evolve into a battle for survival among many related companies, and the trajectory and rate of this transformation may far exceed previous expectations.
It is understood that since 2015, the domestic market share of monocrystalline silicon wafers has gradually increased from a low of 18%, and reached 27% in 2017. In addition, the statistical agency predicts that the global single crystal market will further increase to 45% in 2018. However, Jason Tsai believes that the 45% estimate is based on the global installed capacity of photovoltaics reaching 100GW this year. If the new capacity of the market drops to 80-90GW this year, the share of single crystal may reach 50%. Above, 'because the overall market demand has declined, if the market considers single crystals first, then the polycrystalline market share will be compressed.'
Longji pointed out that the two price adjustments that Longji had previously carried out in February were just to guide the market to switch to the single crystal route. In fact, from the current situation, there is still room for the operation of the single crystal leading enterprises.
Jason Tsai believes that the market is still in surplus, and there are even some capacity shrinkage and production stoppages. However, due to shrinking demand, some capacity shrinkage has not kept up. At present, the gross profit margin of polysilicon wafers has been terrible. The only room for price reduction comes from Reduce the cost of polysilicon materials.
In contrast, the single-crystal leading enterprises still have room to adjust. 'Based on the price after this price cut, the price of Longji fell to 3.35 yuan, the price of Central is 3.25 yuan, and the cost of second-line single crystal manufacturers is about 3.1 yuan. To 3.2 yuan, the cost of leading manufacturers such as Longji Central is 2.8 yuan or 2.7 yuan.
'If the single crystal carries out a positive price strategy, then the single polycrystalline battle will be won in the third quarter of this year. Because the polysilicon chip manufacturers have no way to support this continuous oversold operation.' Jason Tsai said.
Therefore, the industry expects that both polycrystalline silicon wafers and monocrystalline silicon wafers will be further lowered in price, and some polysilicon material manufacturers may be discontinued. However, if the price of polysilicon manufacturers rebounds, it may be difficult for the manufacturer to support it.
Manufacturers face survival crisis
As mentioned above, under the expectation of overcapacity, single crystal manufacturers are squeezing the polycrystalline market through price strategy, but when the leading monocrystalline faucets such as Longji, Central, etc. will win the victory of the technical route, they will be squeezed out. In addition to polycrystalline manufacturers, there may be second-line single crystal enterprises in the photovoltaic market.
In fact, cost is the key to this price war, and the cost of silicon wafers comes from the non-silicon cost of silicon materials and rods, slicing, etc. Compared with second-line single crystal manufacturers, Longji, Zhonghuan and other single crystal faucets have technical advantages. , can greatly reduce the cost of non-silicon, and has an advantage when negotiating with upstream silicon manufacturers, so there is a cost difference between the first and second-tier manufacturers of about 0.2 yuan.
Jason Tsai said that after a rough estimate, based on the June 14 price adjustment, the price reduction of about 0.4 yuan came from the decline of silicon material prices, 0.2 yuan from the original gross profit compression, and in this price cut, Longji is compressing At the same time of its own gross profit, it also indirectly lowered the gross profit of the second-line single crystal manufacturer.
For example, he believes that, for example, Longji's original gross profit margin is 20%, and after the price adjustment, it is reduced to 15%, which reduces the original gross profit of 25%, but for second-line single crystal manufacturers, such adjustment may be compressed. They account for 70% of the gross profit, so the price difference for the first- and second-line single crystal manufacturers is very large. In addition, in order to improve the competitiveness of second-line single crystal manufacturers, the price of their products will generally be 0.1 yuan less than the first-line manufacturers. This means that under the advantage of cost, single crystal second-line manufacturers may begin to face elimination.
'First of all, the elimination crisis is the second-line single crystal manufacturer in Jiangsu and Zhejiang provinces. First, the electricity costs of these manufacturers are relatively high. Second, their pull rod technology is not matured by leading enterprises, so the cost of such manufacturers is the highest; Companies in cheaper regions, such as second-tier manufacturers such as Inner Mongolia, Shanxi, and Shaanxi, may still be able to sustain this price of single crystal, but if there is a next wave of price cuts, then such manufacturers It will also be affected. Therefore, the current situation is phased. Although it is impossible to conclude that the second-line single crystal manufacturer will be eliminated, it will start to fall into operational difficulties. This is certain.
In addition, Longji related people also pointed out to the Times Weekly reporter that although there will be greater pressure on PV companies in the short term, on the other hand, they will accelerate the integration of the industry and the concentration of the market. 'In the future, some uncompetitive small factories, It will be more difficult to survive in the future .
However, it is worth noting that Jason Tsai pointed out that in August, as domestic and overseas developers become accustomed to low-cost market development, the wafer market may gradually pick up, especially when the market enters the leader's stocking in September. After the period. 'So from the end of August, you need to observe whether the market has released a good signal. If there is, the market may gradually go up, the situation of silicon wafer manufacturers will ease some, especially the polysilicon chip manufacturers. However, it still failed to reach the situation that allowed it to resume production capacity.