12 July 2012
Sales of German manufacturers of PV components, machinery and equipment fell in the first quarter of 2012 by 54 percent over the same quarter last year, the German Engineering Federation (VDMA) reported on the sidelines of the Intersolar North America in San Francisco this week.
"The photovoltaic supply industry is suffering from the continued weak investment activity of the wafer, cell and module manufacturers. In particular, equipment for cell production was less in demand at the beginning of the year, "explains Dr. Peter Fath, CTO of Centrotherm Photovoltaics AG and Chairman of the Board of VDMA Photovoltaic Equipment. Compared to the international competition, German photovoltaic engineering companies still are in a relatively good position and were able to defend their 40 percent world market share in the first quarter 2012. "This is primarily due to the continuous innovation and strong focus on a cost-effective photovoltaic production. The label Made in Germany still stands for the highest quality standards and cost-effective solutions”, says Dr. Florian Wessendorf, project manager in the team of VDMA Photovoltaic Equipment.
Decreasing willingness to invest in Asia
Even in the first quarter of 2012 Asian customers were the backbone of the sales generated, however, the decline there is particularly severe. Based on the same period last year, 60% less revenue was generated. "We certainly expected a slowdown of the market in Asia at the beginning of the year. The sharp decline in Asian orders in the previous three quarters was an indicator for this”, says Wessendorf. At the beginning of 2012 the export rate was 80%, and thus is a few percentage points lower than in recent quarters. Also on the move are the different segments of PV production. Although the equipment for cell production with a share of 56% is still the key segment, in the past values of 70% were common. More than 18% of total sales accounted for plants for polysilicon, ingot and wafer production. Similar to the crystalline backend - the module production - the thin-film segment accounted for just over 13%.
New order income
As to order incomes, the situation has eased somewhat. Compared with the previous quarter, there was an increase of 21% in the first quarter of 2012. However, the order situation is dominated by a few large individual orders, which is why the order situation of the German PV suppliers is very uneven. Major shifts also arise at the regional breakdown of orders. While in recent years, the Asian business was the driving force of market development, in the first quarter of 2012, there were major investments taking place in the MENA region.
"In addition to the continuous improvement of production processes and the minimization of costs, also the strategic development of new markets is on the agenda for the German PV engineering. For PV production, countries of the MENA region, India, Brazil and South Africa are increasingly becoming interesting. Nevertheless, the core business in Asia should not be neglected, as well as the production site in Europe, "says Fath. The order range of reporting companies increased at the beginning of 2012 to 6.5 production months, according to Fath. “Despite the current enormous challenges for the industry, as for the German photovoltaic engineering I am confident. Currently what it takes is to do the homework which means solving the conflict between short-term market slowdown and long-term growth prospects, "says Fath.
Approximately 100 VDMA member companies are active in the photovoltaic sector. The German Engineering Federation represents over 3000 companies of medium-sized plant and machinery manufacturers.
Written and translated by Andreas Breyer, Senior Editor, Germany