PV Industry Unwinding the Crunch
On October 14th, a notable seminar was convened by the photovoltaic (PV) industry, with a title that leaves little to the imagination: "Preventing Involutionary and Malicious Competition in the Industry." However, the aftermath of this meeting has yielded a rather pessimistic outlook, with rumors circulating among industry professionals suggesting that not only was there a lack of tangible consensus but some even proposed the meeting was a failure. Statements from participants to various media outlets indicated skepticism, suggesting that despite vocal opposition to adverse practices, businesses were still caught up in the ongoing competitive spirals intrinsic to the industry.
The gravity of this seminar is underscored by its composition—an array of prominent figures from the industry attended, contributing to its substantial impact on the discourse surrounding the solar PV field. Organized by the Chinese Photovoltaic Industry Association (CPIA), a government-sanctioned national-level association, this meeting underscored the organization's influence. Founded a decade ago, the CPIA boasts membership encompassing nearly all aspects of the PV production chain, including polysilicon manufacturers, wafer producers, cell manufacturers, module makers, and inverter developers.
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Attendees included executives from some of the most renowned companies in the sector, often referred to as the big players: the "four kings" of silicon material production, leading companies in various technological fronts, and prominent venture capitalists with stakes in the solar market. Notably, this roster featured titans from the ongoing N-type technology dispute, representing the most prominent firms championing TOPCon and BC technology paths.
Despite the star-studded lineup, reports indicate that the discussions themselves were rather ambiguous. The meeting's closed-door format posed an obstacle to transparency, as the deliberations confined to these elite circles often left the broader market in the dark about the specifics and outcomes. CPIA's official post-meeting communication reiterated platitudes about enhancing industry self-regulation and eliminating ineffective, low-performing capacities without delving into the nuances necessary for real progress. Observers noted that the lack of concrete outcomes felt like a reiteration of previously stated objectives and failed to bring any fresh insight into overcoming the challenges posed by overcapacity.
Moreover, the interpretive vagueness surrounding the term "outdated capacity" raises questions about the viability of strategies to phase out inefficiencies. While the concept might seem straightforward—identifying and eliminating non-competitive operations—defining what constitutes ‘outdated’ becomes complex when various companies have differing stakes and competitive models. The lack of a universal understanding among attendees illustrates the difficulty inherent in reaching common ground in an industry driven by fierce rivalries.
In examining capacity reductions proposed during the seminar, it appears several attendees expressed outright resistance. The prevailing fear is that curbing output would hand market share to competitors unbound by similar constraints, thus rendering a collaborative reduction counterproductive. Diverging opinions concerning price management and competitive strategy cement the reliance on cutthroat practices rather than fostering a collaborative environment for sustainable growth.
The ethos of opposing involution and malicious competition resonates profoundly amidst the current backdrop characterized by high inventory levels, declining prices, and intense market pressure on PV enterprises. While rhetoric during the seminar projected a vision of cooperative future strategies, actual market behavior tells a different story. The competitive landscape remains fraught with strategic disputes as stakeholders pursue individual goals.
The dynamics unveiled by the activities of leading firms provide evidence of this competitive tension. For instance, Trina Solar’s recent moves in patent litigation against entities like Aikosolar highlight the extent to which these companies are still embroiled in fierce competition despite professing desires for a more stable market. The increasing prevalence of patent disputes and product misinformation reflects a market where firms feel compelled to engage in aggressive posturing to maintain or enhance their market positions, rather than the promissory cooperation articulated in high-level meetings.
Amidst spiraling prices and mounting operating pressures, industry leaders diverge in their approaches to cutting output and modifying pricing structures, with some firms advocating active reductions while others pursue aggressive low-cost strategies, leaving the market soaked in pricing volatility.
Moreover, as repercussions of this dynamic unfold, it remains to be seen whether these discussions will foster the much-needed industry-wide mentality or if firms will continue to act independently, prioritizing immediate competitive wins over collective stability.
Ultimately, many experts in the photovoltaic sector assert that merely holding seminars and discussions may fail to yield substantial results on their own, especially against a backdrop of declining demand forecasts and the unavoidable pressures faced by upstream manufacturers. Instead, they argue that real outcomes will likely depend on the theatricality of mergers and acquisitions or the harsh realities of market competition where companies must stake their futures in unrelenting rivalry.