With such severe price declines, only 12 Chinese PV polysilicon manufacturers are still producing, and more than half of these companies are running at reduced utilization rates. Industry-wide, wafering plant utilization is forecast to average only 53% in 2012.

But as prices approach current cash costs of even tier 1 makers, price declines are expected to slow to less than 7% per year. Average 2013 polysilicon prices are projected to be $23/Kg and wafer prices to be $0.25/W. As described in the NPD Solarbuzz Q2’12 Polysilicon and Wafer Supply Chain Quarterly Report, even at these low prices, top tier makers have a path to positive margins.


Figure 1: Tier 1 Integrated Maker Wafer Manufacturing Cost/Margin Breakdown in 2013

Source: NPD Solarbuzz Q2’12 Polysilicon and Wafer Supply Chain Quarterly Report

“Although the 30% plus net profit margins of the not-so-distant past are unlikely to be seen again by any PV polysilicon makers in the next few years, leading producers are targeting total costs of less than $20 per kilogram in 2013, which may enable modest profitability,” said Charles Annis, Vice President at NPD Solarbuzz.

Lower-priced polysilicon translates to lower-cost PV wafers. And wafer makers are continuing to drive down processing costs with holistic approaches to reducing slurry consumption, increasing recycling, reducing kerf loss, reducing electricity consumption, increasing conversion efficiency, and more productivity enhancements.

“Many of the less cost-competitive PV industry participants will not survive the new low-priced environment, but even at prices $0.25/W, top-tier wafer makers, particularly those with low-cost internal polysilicon supply, are targeting 12% or better margins,” added Annis.

In the new normal, low-priced PV polysilicon and wafer industry environments, cost reduction is critical for both survival and success. The NPD Solarbuzz ‘Polysilicon and Wafer Supply Chain Quarterly Report’ tracks and analyzes cost metrics on a quarterly basis.

Visit NPD Solarbuzz at www.solarbuzz.com