This high demand predicted for 2011 supports U.S. thin-film solar module producer, First Solar¡¯s recent decision to make significant increases to its production capacity expansion plans for the next two years. Two additional four-line plants will be added in the U.S.A. and Vietnam in 2012 in addition to previously announced expansions in France, Germany and Malaysia.
These expansions would suggest that the dominating thin-film supplier¡¯s production capacity will reach over 2.7 GW by the end of 2012 at current line run rates. However, given its history of improving throughput, IMS Research estimates that its capacity could in fact reach over 3 GW by then.
First Solar¡¯s capacity expansion plans are unlikely to be mirrored by many of its competitors who may be facing slowing demand as the German market begins to run out of steam. If we look back to early 2009, while the rest of the industry experienced a stagnating market and slow demand from many countries, First Solar bucked the industry trend, significantly increasing capacity and more than doubling its shipments, increasing its market share (in MW) to 10.7%, from 6.9% in 2008. However, in 2010, while its crystalline competitors¡¯ capacity has been added at a frantic pace, First Solar has added just one extra line and has remained capacity constrained throughout the year. As a result, although total PV installations are forecast to double in 2010, First Solar¡¯s shipments are predicted to grow by just 25%, causing its market share to shrink to around 8% according to IMS Research¡¯s latest estimates.
PV Research Analyst Sam Wilkinson commented, ¡°Whilst much of the industry has indicated uncertainty and a possible reduction in demand in 2011 with Germany¡¯s small commercial segment likely to decrease the most in MW terms, First Solar is expecting an increase in demand for its products and a need to accelerate capacity expansions.¡± ¡°Whilst it wasn¡¯t fully able to benefit from the booming German market which has so far favored roof-top installations, it is now likely to see robust demand from large plants in Europe as well as its own enormous utility-scale pipeline in North America,¡± added Wilkinson. ¡°IMS Research forecasts significant growth for First Solar¡¯s primary market--utility-scale PV installations in 2011, with these systems projected to grow five-times faster than the rest of the market.¡± continued Wilkinson.
Assuming demand remains high enough to keep the additional lines highly utilized, these capacity expansions will also aid First Solar in reducing its costs, further beyond its competitors. Already the market leader in reducing module costs, the U.S. supplier announced that it had achieved a record low of US$0.74/W in Q2¡¯10. With high demand and tight supply currently maintaining high upstream prices for crystalline PV module prices, First Solar looks ideally poised to regain market share in 2011.
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