Cell technology advancements are ongoing, and the premium cycle for N-type cells is expected to extend. With the growing recognition of the economic benefits of new N-type cells, the proportion of shipments for N-type cells, particularly TOPCon cells, is projected to continue increasing. Consequently, TOPCon companies at the forefront of this volume growth are expected to enjoy a higher premium during the upgrade period.
The expansion of TOPCon's new technology production is set to drive the release of demand for PV equipment, including pollution prevention control equipment used in the production process. According to PV Tech and SMM statistics as of March 2023, the planned capacity for TOPCon at the national level has surpassed 462 GW. This signifies that the PV industry is entering a cycle of upgrading to new technology, and the expansion of TOPCon's capacity is expected to rapidly boost demand for PV equipment, particularly in the areas of environmental protection and other related aspects.
In the short term, benefits are anticipated to rebound, while in the medium and long term, earnings may face constraints due to quartz sand wafer availability. In the short term, polysilicon prices have stabilized and inventory levels are reasonable, leading to expected stabilization and rebound in wafer earnings. Previously, polysilicon prices experienced rapid declines, but the room for further price reductions has become stable, resulting in smaller fluctuations in raw material prices. As a result, the negative impacts caused by raw materials are expected to diminish. According to SMM, wafer enterprises have proactively reduced production and inventory levels, leading to a decline in wafer inventory from its peak of 181.9 billion pieces to approximately 1 billion pieces. It is anticipated that wafer prices will stabilize, and profits are expected to rebound.
In the medium and long term, the quality of the inner layer sand has an impact on wafer quality and output. Additionally, the tight supply of high-purity quartz sand poses limitations on the overall output of the wafer industry, benefiting leading wafer enterprises with guaranteed access to imported sand. On the other hand, companies that rely on technological innovation continue to expand their advanced production capacity, reduce wafer costs, and ensure the supply of N-type wafers. This enables them to solidify their competitiveness in an era where the focus is shifting from P-type to N-type wafers.
