The reason for the sharp drop in the price of silicon wafers this time is the oversupply of silicon wafers. By the end of 22, the supply is 700, the demand is 300, of which 400 must be idle. Moreover, in addition to the aforementioned 700 supplies, each company also has 370GW supplies under construction or announced planning. This is a serious oversupply, which will inevitably lead to a price war.
The above is the core logic leading to the silicon wafer price war, and it is also an iron-clad fact.
For a detailed description of the details of the surplus of silicon wafers, in my article: web link
As for the price war on silicon wafers, my earliest article was on November 1: Link to the web page I clearly pointed out in the article: From October 31, 2022, the price war on silicon wafers will officially start.
My original words at the time were: the price war for silicon wafers, everything is ready, and a large-scale bloody battle will come roaring at any time!
The facts of the past two months have shown that this prediction of mine is already a fact that no one can deny.
My prediction for the second round of the silicon wafer price war is even more accurate to the number of days: web link
On the afternoon of the second day after posting the post, LONGi really announced a price cut, which perfectly verified my prediction!
I made it clear at the time: For a long time to come, the price war for silicon wafers will never stop! Web links
I also mentioned in no uncertain terms: the underlying logic of the silicon is broken. Web links
The bad thing is: the problem of silicon wafers is not as simple as excess. Don’t think that this is an appropriate excess, a temporary excess, and don’t think that this excess will be alleviated as the demand for components increases in the future. The crux of the silicon wafer problem is that the core technology of silicon wafers has been popularized, and anyone can enter the market to play with silicon wafers. So many new players have been added in the past two years, which shows that the knowhow of silicon chips is no longer difficult to obtain, and everyone knows how to play silicon chips.
Regarding the price war of silicon wafers, I have also posted about 20 posts one after another. Welcome to check out my column and anthology.
Now, a few thoughts on my next steps.
1. The price war for silicon wafers will continue, and it will never stop until a group of players die.
2. The survivors of the price war for silicon wafers in the future will either be big integrated players, or OEMs with clear long-term big contracts in hand.
3. The silicon wafer link will no longer have excess profits, and its profit level will be one of the lowest among the four photovoltaic links.
4. The link of silicon wafers no longer has independent pricing power.
General conclusion: The four links of photovoltaics will become more and more integrated, and the link with the weakest moat will be the first to be swallowed up by other links.
Looking at photovoltaics as a whole, its demand side is still a sea of stars, and its supply side competition has not deteriorated due to the silicon wafer price war.
After the silicon wafer price war, photovoltaics is still not a track where anyone can enter as they wish, and the concentration of the other three links other than silicon wafers is still increasing.
For those pretenders outside the photovoltaic circle, the photovoltaic giants represented by Tongwei are still towering trees and the Great Wall of Steel that they dare not provoke.
$LONGi Green Energy(SH601012)$
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