Applied Materials (AMAT) led the solar cell equipment market for the fourth rear in a row in 2011 as revenues for the top 8 manufacturers grew 10.7%, as shown in the chart below according to The Information Network's report Opportunities in the Solar Market for Crystalline and Thin Film Solar Cells.
Meyer Burger (SIX)
GT Advanced Technologies
Roth & Rau AG (GM:RRAUF)
Applied Materials continued to lead the market on the strength of its solar product line that includes Precision wafering systems and Baccini screen printers. Revenues grew 28.5% between 2010 and 2011.
Meyer Burger maintained its second place position, growing 59.1%. Organic growth was 44%, whereas 15% of growth was based on the Roth & Rau acquisition in August 2011. Roth & Rau recorded revenues of $280 million prior to its acquisition.
GT Advanced Technologies (GTAT) was in fourth place and revenues dropped 16.3% in 2011 on sales of equipment for polysilicon furnaces and cell manufacturing.
RENA products cover the full range of wet processing for the solar industry, including handling, transport and measurement solutions. The company recorded a growth of 62.7% to revenues of $475 million in 2011.
Over capacity will continue to dominate in 2012. Subsidy cuts in Europe have triggered a global glut of solar panels and driven down prices sharply, and the equipment market has been damaged by oversupply and weak pricing. Due to the European financial crisis, subsidy reductions are occurring faster than both cost reductions and technological advancements.
Equipment spending will drop in 2012 as a result. Suntech (STP) recently announced CapEx for its most recent quarter was $23 million compared to $129 million in the year ago period. The company is restricting its CapEx in 2012 to payments for already levered equipment and services and technology upgrades. Other solar manufacturers are following suit.
Survival tactics of solar cell manufacturers will be a bright spot for equipment manufacturers. China Sunergy (CSUN) CEO, Stephen Cai recently presented four key strategic business developments, which need to occur, if companies are to weather the solar storm: (i) higher efficiencies; (ii) downstream investment; (iii) global operation; and (iv) diversified channels.
The first item, higher efficiencies, is critical for equipment manufacturers. As new solar cell designs are implemented or new processes designed to increase efficiency, new or additional equipment is needed. For example, privately held SolarPA (New Tripoli, PA) has developed a proprietary nanocrystal coating that increases the efficiency of solar cells by more than 1%, and has recently announced a reduction in cost of goods to $0.20 per panel or less than 0.1 cent per watt. The coating is applied on a completed cell with no disruption to the cell manufacturing process and can be applied using a screen printer. Hence, screen printer companies can generate added revenue because of the need for cell manufacturers to increase efficiencies.