In a rapidly evolving solar industry, N-type cell technology has witnessed a significant uptick in production demand, driven by advancements in battery technology, according to a report from TrendForce. The surge in popularity of cost-effective TOPCon cell technology in 2022 has led to the rapid expansion of N-type cell technology, with many solar industry players entering the competition. This shift may also pose a risk to the dominance of PERC cell technology used in producing P-type cells.
TrendForce’s analysis suggests that as large-scale N-type cell capacities become a reality, there is a potential for a substantial portion of PERC cell technology capacities to phase out within the next two to three years. Simultaneously, the gradual increase in N-type cell capacities could lead to sporadic shortages of high-quality silicon materials and wafers tailored for N-type cells, potentially resulting in a noticeable price difference compared to their P-type counterparts.
Abundant Silicon Supply but Widening Price Gap
As of the end of 2023, the total production capacity of polysilicon is projected to reach 2.072 million tons, reflecting a YoY increase of 68.6%. Silicon material output is estimated at approximately 1.483 million tons, sufficient to meet the needs of over 600 GW of solar panel consumption, considering a silicon consumption rate of 0.245 tons per GW. This oversupply aligns with an annual installation demand of approximately 370-390 GW, which may cause a drop in the price of P-type silicon. On the other hand, N-type silicon, in high demand but with limited output, may experience periodic shortages, potentially stabilizing its price and offering better profitability for silicon firms.
Surge in N-Type Cell Slices Demand Spurs Transition Among Silicon Wafer Manufacturers
By the end of 2023, silicon wafer production capacity is set to reach approximately 921.6 GW, marking a significant YoY growth of 64.2%. The rising demand for N-type cell wafers has prompted silicon wafer manufacturers to swiftly shift their focus towards N-type production, leading to an increase in output. However, the inclusion of rectangular silicon wafers may result in short-term supply shortages for certain dimensions of P-type wafers. There is also the possibility of oversupply in N-type wafers if the rollout of N-type cells does not meet expectations. Leading companies like Longi and CMC are actively enhancing their competitive edge through intensified industry competition, leveraging their technological expertise, access to high-purity quartz sand, and a consistent supply of top-quality silicon wafers.
N-Cell Capacity Deployment Faces Delays; PERC Tech Likely to Maintain Dominance
In 2023, wafer capacity is poised to surge, reaching an estimated 1,172 GW, marking a remarkable 106% YoY increase. The lion’s share of this capacity boost is driven by N-type TOPCon cell technology. By year-end, N-type wafers are forecasted to reach 676 GW, constituting 57.7% of the total capacity. Nevertheless, TrendForce has identified delays in N-type cell deployment. Despite this, due to the price disparity between N-P type wafers, PERC technology is expected to maintain its market dominance this year, even as the adoption of TOPCon cells accelerates.
China Expected to Maintain Solar Panel Capacity Dominance
In 2023, global solar panel capacity is forecasted to reach an impressive 1,034 GW, marking a YoY increase of 64.7%. Of this capacity, approximately 335.4 GW is attributed to newly added capacity, primarily driven by Chinese enterprises. With Western countries and India implementing policies supporting local manufacturing, Chinese firms are considering expanding production capacities overseas to bypass trade barriers. According to TrendForce, leading Chinese solar panel manufacturers like Longi, JinkoSolar, JA Solar, and TrinaSolar have already expanded operations to regions including the US, Europe, and the Middle East. Given the maturity of Chinese manufacturers’ technology and cost-effective production, along with the nascent state of solar supply chains overseas and the higher costs associated with expansion, it remains challenging for enterprises from other regions to enter the competition. TrendForce predicts that the global competitive landscape for solar panels is unlikely to see significant changes in the near term, with China maintaining its dominant position, anticipated to hold 80-85% of the capacity share in 2023.