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Emergence of Asian solar cell makers backed with government support:
Japanese manufacturers were the first to enter the solar cell production field in Asia,
but new entrants have pushed their share of the market down to about 22% as of
2007. In particular, Asian companies have sprung up in the field with the support of
their governments. A common trend among those Asian companies is their rapid
emergence in a relatively short period of time, made possible by taking advantage of
solar cell production equipment and expertise from equipment makers in European
and other countries.
• Taiwanese LCD and semiconductor makers also entering the solar cell market:
In Taiwan, the government has been fostering its solar cell industry into a
manufacturing center, and by the end of 2008 we expect it to achieve world-class
production capacity at levels rivaling those of China and Japan. Eyeing expansion in
the market, some leading Taiwanese LCD and semiconductor makers have entered
the solar cell field to latch onto growth potential. Overseas companies often supply
the production equipment, while shortages of silicon materials have gradually formed
a bottleneck. Those Taiwanese companies have thus started to strengthen
development with the eventual aim of domestically procuring thin-film solar cells.
• Leading companies in mainland China also growing rapidly: The solar cell
industry has been expanding sharply in China, and it had the largest production
capacity in the world as of end-2007. Under the 11th Five-Year Plan, plans call for
increasing the amount of power generated by solar cell systems in China to
300,000KW by 2010, but the industry seems more geared to exporting solar cells at
this time. Suntech Power Holdings [STP US] (No rating; $37.46, 30 June close) is a
leading mainland Chinese company listed in the US that ranks third in the world,
shipping about 10% of all solar cells shipped in 2007. In summer 2006, Suntech
Power acquired MSK, a major solar cell module maker in Japan, which started
assembly and production of solar cells in Japan in 2008.
• Singapore aims to be a clean energy hub: Singapore aims to become a global
hub for clean energy, and aims to nurture its clean energy industry into a S$1.7bn
market by 2015. The solar cell industry there has begun to emerge, with leading
European companies announcing their intentions to operate in Singapore.
• We see growing business opportunities in Asia for Japanese, US, and
European solar cell production equipment makers: Solar cell production
equipment makers have begun to expand their business capabilities in Asia, where
the industry shows signs of taking off with government and regional support. We
think business opportunities are growing in particular for Ulvac [6728] (Strong buy;
¥3,720), which offers turnkey solutions and has been winning orders for thin-film
solar cell production equipment from leading companies in Taiwan and mainland
China. Meanwhile, Japanese module equipment maker NPC [6255] (No rating;
¥6,120) plans to establish a foothold in Singapore in line with its strategy of pushing
into other markets in the Middle East, India, and China.
Nomura Securities Co Ltd, Tokyo
Asia & Emerging Markets Research
Date
2 July 2008
Japanese full report & English summary: 1 Jul
Report no. A08-168
Investment Strategy
Y. Iwata
[phone]
[e-mail]
Financial & Economic Research Center
Nomura Securities, Tokyo
N omura 9 2 July 2008
May