Date: 03/12/2010

Solar PV semiconductor equipment book-to-bill dips in 3rd Q 10, says a study

Market researcher Solarbuzz has reported in Q3'10 (ending 30 September 2010), the solar PV (mainly semiconductor material processing and packaging) equipment Book-to-Bill ratio fell after an eight-quarter high during Q2'10, to a three-month average of 1.16.

According to Finlay Colville, Senior Analyst at Solarbuzz, "The latest PV Book-to-Bill figures are a direct consequence of PV manufacturing equipment suppliers ramping up deliveries following the strong order backlog accumulated during 1H'10, and these figures were matched by record PV tool revenues reported by several leading PV suppliers during Q3'10."

Colville added, "Until now, there has been no Book-to-Bill information for the PV industry. Indeed, reporting on the PV equipment supply chain as a whole has received less attention when compared to other aspects of the solar industry. This has provided challenges for equipment suppliers when seeking to benchmark their performance against both industry averages and process tool segments within their served markets."

According to Solarbuzz, during 2010, PV manufacturing equipment revenues will easily exceed the US$10 billion level, with Applied Materials recently becoming the first equipment supplier to pass the US$1 billion threshold for PV specific tools within a trailing twelve month trended period. Several other tool suppliers will also report PV revenues during 2010 in excess of US$500 million.

In an interview article titled "Solar mission target challenging, but achievable" reported in Indian Express, Madhusudan V Atre, President & managing director of Applied Materials, points out his company's gain due to India's solar mission of producing 20 giga Watts of solar power by 2022, where he says solar modules and solar cells used will have to be manufactured in India and his company is a equipment supplier to serve this market.

Solarbuzz has analyzed crystalline Silicon (c-Si) cells account for 85-90% of PV production during 2010, the breakdown of PV equipment revenues by technology reflects a broader contribution from the c-Si and thin-film segments, indicative of continued investment into established and emerging production types. In fact, the second cycle in thin-film fab investment is forecast to peak during 1H'11, with strong equipment revenues forecast from fabs currently at the build-out phase, adds Solarbuzz.

Solarbuzz notes, in contrasting to on-going capacity expansions, downstream demand for PV modules during 2011 is likely to be subject to a range of policy driven uncertainties. Therefore, specific checks are urgently needed to monitor the level and timing of the most recently announced expansion plans for 2011, with a more robust means of assessing pending capacity over-supply within the industry among top tier producers.

A Book-to-Bill ratio compares the total amount of orders received to the total amount of product shipped and billed within a given period. It is the ratio of demand versus supply in the equipment supply chain. In this case of PV Solar cell semiconductor equipment Book-to-Bill ratio of 1.16 means that US$116 worth of orders were received by PV equipment suppliers for every US$100 of product billed for the preceding quarter under review.