PV equipment spending (including c-Si ingot-to-module and thin-film fabs) is forecast to decline to an eight-year low in 2013, as the industry reacts to the dearth of new purchase orders and de-bookings of the past 12 months.
Spending during 2012 has been dictated by accounting rules and the ability of company accounts-receivable departments to extract payment from manufacturers that placed ambitious tool purchase orders back in 2011 and were finally forced to receive and pay for equipment that they ultimately did not want or could not use in 2012.
But the main problem was lack of new purchase orders in 2012, and there is no great surprise here. Examples of PV manufacturers needing any additional capacity this year can be counted on one hand, and the volumes can be measured in the low 100’s of MW, not in GW. Add in the de-bookings, and 2013 is almost devoid of any meaningful backlog or pending revenues to be recognized.
Source: Adapted from NPD Solarbuzz PV Equipment Quarterly
PV equipment spending for 2013 is likely to be at the $2 billion level, a huge reduction from the $12-13 billion revenue opportunity last seen in the peak year 2011. Equipment spending is not the same as tool shipment in the PV industry. Equipment spending is revenue recognition, the only parameter that renders a tool shipment as ‘real’.
Equipment suppliers operating in adjacent segments will retain skeletal PV resources and R&D, and plan for the next upturn from 2014 onwards. Suppliers that were serving only the PV industry have almost no option but to hunker down for another 12 months, reduce operating costs to a minimum, and hope that investors and shareholders retain confidence in their long-term prospects and those of the PV industry as a whole.
While the news may sound rather bleak and depressing, the abrupt downturn has enabled a key inflection point to be reached, in which the legacy supply-chain for tooling to the PV industry has been wiped out. Therefore, any equipment suppliers that had fought to get into the supply-chain and failed have another chance! When PV equipment spending resumes, it will do so from a blank sheet of paper, and ultimately this will create many new opportunities with new tools in the coming years.