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Value Chain Activity: Manufacturing Crystalline Cells


Context

Cell manufacturing involves creating the all-important pn-junction, coating and layering. It is an important step in the value chain that is responsible for 14% of a module's cost and it is here where significant technical differentiation is created.

Industry Dynamics

High capital requirements


High capital requirements for the manufacturing line combined with need for economies of scale mean can make it difficult for new entrants.

 

Upstream supply secured wtih long-term contracts

Suppliers of wafers are either independent wafer companies or polysilicon producers themselves. In any case, the supply is dominated by the relationship with polysilicon suppliers. See separate section on dynamics.

 

Conclusion

The trend towards vertical integration is very evident in this segment. Of 62 companies surveyed in 2009, only 19 were pure and simple cell manufacturers. Many were both forward- and backward- integrated into wafers and modules. By 2020, most of those companies have either folded or been absorbed by larger companies that also manufacture the modules if not even more steps in the value chain..

Competition based on differentiation and price

Competition
After years of consolidation the pv industry has become much more concentrated on a few.

Balance Sheet Strength
Spurred on by growing demand, there has been an aggressive expansion of capacity in the past years, most notably in China and Taiwan.

Product Differentiation and Margins
The industry is divided into a technically differentiated, high-efficiency cell segment and a bulk cell production segment with average efficiencies. This is reflected by margins.
Technology Strategy
While some cell manufacturers, most notably Sharp, also take stakes in thin-film technologies, most choose to stick to crystalline silicon technology.
PV Cell
 

Partner with main alternative product

The main alternative to crystalline cells is thin-film. However, switching costs for manufacturers would be high. Instead, to mitigate the risk, cell manufacturers partner with thin-film producers.

 

Downstream: Fragmented industry of module manufacturers

Most cell manufacturers are forward-integrated into modules due to the low margins in the cells- business.


Company Details

We have listed manufacturers in the module section due to the tight forward integration of module and cell- manufacturing.

 

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