Solar PV Manufacturing – The bloodbath continues : Suntech the latest victim

Suntech, the largest manufacturer of PV modules just about a a year back in 2011, has defaulted on its convertible notes. New York Stock Exchange(NYSE)  listed Suntech is likely to be taken over by the municipal government of Wuxi, China as per New York Times.
Suntech is not the only Chinese company to be in trouble. As per GTM Research, another Chinese company listed in NYSE – LDK Solar, which is one of the largest manufacturer of Polysilicon and PV Wafers, sold 20% stake due to financial troubles to a Chinese state-run utility company. Similarly, another Chinese company Chaori Solar was bailed out by the local government. According to the market research firm ENF, more than 300 small Chinese companies spanning the entire PV supply chain(Polysilicon, Wafers, Cells, Modules) stopped operating in 2012.
This is part of the overall consolidation that is happening in the sector. In October 2012, immediately after the acquisition of MiaSole by Hanergy , we at RESolve compiled a partial list of companies that had gone bankrupt or restructured after the folding up of Solyndra in August 2011. (Refer the post here). Six months later, the list has more than doubled, with the inclusion of some of stalwarts like Siemens, Satcon, Oerlikon Solar, etc to the list.
In December 2012, market research firm IMS Research made the following prediction
“The solar module industry will consolidate further in 2013. As 2012 comes to a close, fewer than 150 companies will remain in the photovoltaic upstream value chain, down from more than 750 companies in 2010. Most of the consolidation will involve companies going out of business entirely. Many integrated players, particularly those based in China, will fold up shop in 2013. The large expense of building and then operating integrated facilities that are underutilized will be more than many can handle financially.”
This prediction seems to be  especially true in the case of Suntech.
It is not just Chinese companies that are in trouble. In India, solar PV manufacturers are struggling and many of them are not operating their assets at all. In fact, Tata Solar Power, one of India’s iconic PV manufacturers, has stated that Tata might exit the PV manufacturing business if the current situation continues.
The only question that remains is, when this bloodbath is going to stop and when the will market reach a healthy equilibrium. The day may not be far off.
Given below is the second list of companies that went bankrupt in the last 6 months or more. The first list can be accessed here.
consolidation 2
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