Gtm poly-webinar-feb-2012
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Gtm poly-webinar-feb-2012 Gtm poly-webinar-feb-2012 Presentation Transcript

  • Polysilicon 2012-2016: Supply, Demand & Implications for the Global PV Industry Webinar on February 9, 2012Moderator: Speaker:Carolyn Campbell Brett PriorResearch Associate Senior Analystcampbell@gtmresearch.com prior@gtmresearch.com
  • Webinar logistics • First, make sure the volume on your computer is turned up • Webinar will be archived and available within 24 hours, you will receive an email when it is available To enlarge the slides, please click on the circular green button in thePlease enter your questions top right corner of at any point during the the slides sub- webinar by typing them in window this box, then clicking “Submit” By clicking on the green button (the Resource List), you can If you are still having problems hearing (or 1) Download a copy of the slides viewing) this webinar, click on the yellow “?” 2) View the report webpage, and purchase the report button at the bottom of the page
  • http://www.greentechmedia.com/research/report/polysilicon-2012-2016 200+ Pages 120+ Company profiles 90+ Charts, Tables, and Illustrations Historical and forecast capacity, cost, and price from 2008-2016
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesWhy should you care about the cost of polysilicon?Because lower poly prices and higher module efficiency will shave ~$0.20/W off the cost of a c-Si module in 2012 alone Numbers look too low? Here are the 3Q11 results: Forecasts included in the full report • Trina • $0.65/W non-silicon cost • $0.37/W silicon cost • $1.02/W total cost • Best-in-class conversion costs by step • Wafer $0.17/W (GCL) • Cell $0.17/W (LDK) Forecasts included • Module $0.28/W (CSI) in the full report • Non-Si $0.62/W
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesSolar PV manufacturing 101
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesPolysilicon manufacturing 101
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesPolysilicon industry is concentrated, could be considered a“balanced oligopoly” • HHI is measure of industry concentration on a scale of 0 to 10,000 (10,000 is a monopoly) • A market with an HHI less than 1,000 is regarded as competitive • Poly industry is ~640
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesEven with 22 GW of c-Si PV installed in 2011, there still remains significantoversupply at all stages of the value chain
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesChina, the US, and Korea are the 3 largest producers of polysilicon
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesCosts that vary by technology include energy (~13%), and depreciation &interest (~48%)
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesEnergy use matters, and in this category FBR and UMG win
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesBut Capex (which determines Depreciation & Interest) is much more importantthan energy use, and on this metric Siemens HC and UMG “take the cake”
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesLower purity poly sells at a 10-30% discount to higher purity poly
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesExcluding Depreciation & Interest, FBR is the cost leader
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesBut, when depreciation & interest are included, Siemens HC is the lowestcost option
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesAnd on the most important metric, profit, Siemens HC again takes the gold
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesHistorically, capacity has remained close to total demand
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesBut in the last 4 years, capacity growth has outstripped demand growth, andthis imbalance may get worse before it gets better
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesProfit margins are key to understanding where pricing is headed
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesSpot prices are driven by cash costs, whereas contract prices have afloor set by total costs
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesSince 2009, cash costs for poly have been reduced from ~$40/kg to <$20/kg Poly Cash Costs (excl depreciation, SG&A), 2009-present $80 $70 Poly Cash Cost, excl depreciation ($/kg) $60 $50 $40 ReneSola, $36 $30 $20 GCL, $18 LDK, $20 OCI, $18 Daqo, $18 $10 REC FBR, $13 $0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 2012
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesDepreciation adds another $3-8/kg to manufacturing costs Poly Manufacturing Costs (incl depreciation, excl SG&A), 2009-present $120 $100 Poly Manufacturing Cost, incl depreciation ($/kg) $80 $60 $40 LDK, $27 $20 Daqo, $22 GCL, $21 REC FBR, $20 $0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 2012
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesPoly ASPs collapsed in 4Q 2011, falling over 40% at REC Poly ASP by Manufacturer, 2010-present $80 $70 $60 REC, $57 Daqo, $52 42% $50 Poly ASP ($/kg) drop GCL, $44 from 3Q $40 to 4Q REC, $35 $30 $20 $10 $0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesEBITDA Margins have fallen from very attractive (50-70%) to toxic in just 4 quarters EBITDA Margin by Poly Manufacturer, 2008-present 80% OCI, 70% 70% EBITDA Margin, % of revenue 60% 50% REC, 51% 40% Wacker, 39% OCI, 34% 30% REC, 28% 20% 10% 0% 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesIncluding the impact of depreciation, EBIT margins are now approaching 0% EBIT Margin by Poly Manufacturer, 2008-present 60% OCI, 57% 50% EBIT Margin, % of revenue 40% REC, 34% 30% Daqo, 29% 20% 10% OCI, 6% REC, 4% 0% 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesWhat is next for the polysilicon industry?• Where is pricing headed?• When will the plant closures allow the supply/demand gap to close?• The feast is over - which companies are best positioned to survive this period of famine?
  • 2. Comparison of Polysilicon Production 1. Polysilicon Overview 3. Polysilicon Supply and Demand 4. Polysilicon Economics TechnologiesSupply stack analysis can help to reveal the likely winners and losers, as wellas future pricing trends Cost estimates for every operational poly plant included in the full report
  • Q&AModerator: Speaker:Carolyn Campbell Brett PriorResearch Associate Senior Analystcampbell@gtmresearch.com prior@gtmresearch.com