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Investment Opportunities in the

PV Industry in Taiwan

I. Reasons to invest in the PV industry in Taiwan

1. Number two PV exporting country in the world

2. Complete PV industrial chain from the upstream to the downstream

3. Industrial environment of semiconductor and panel industries

4. Competitive advantages of Taiwan and China are complementary to one another

5. Diverse cluster development systems for related industrial clusters

II. Current status of the PV industry in Taiwan

(1) Current status and development trends of the PV industry in Taiwan

Since the industrial output will become clear in the fourth quarter in 2011, the

price of Polysilicon is expected to decline by the end of this year. It is forecast that

the price will likely come down to below US$20 per kg and the material resource war

will be fierce in 2012.

In the next two years, there will be a surplus for solar cells in the market and the

price of Polysilicon materials will sharply decline as China and South Korea start mass

production of materials, and this will further put downward pressure on the prices of

polysilicon solar cells. As it is getting closer to the completion of Grid Parity project

undertaken by countries in which electricity is costly, governments in these countries are

likely to suspend or even terminate their subsidy programs. By them, the government can

focus on expanding domestic demands while suppliers put their emphasis on integrating

BIPV applications and enhance added values for the integrated applications.

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1. Developments in the industry

For the semiconductor industry, TFT-LCD industry, LED industry, and IT

power electronics industry in Taiwan, their industry clusters are complete and

involve not only suppliers, but also academic community, industrial research

institutes and related industrial associations. If classified in a deep level, then the

entire industry can be divided into the upstream and downstream of silicon materials,

silicon wafer manufacturing, solar cells, solar modules, peripheral equipment and

back-end system integrators. There are about 30 domestic suppliers in this industry,

and the total investment is more than NTD$100 million.

The chart below is the forecast of Solarbuzz for the worldwide solar

photovoltaics cell market (including both optimistic and conservative estimates).

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Wildcard 0 0 0 0 0 0 0 800 2,400 4,800

SB incremental (low-risk)

0 0 0 0 0 0 326 2,556 6,895 16,089

Planned (at risk) 0 0 0 0 0 0 602 2,436 5,316 7,295

Installed / Planned (low-risk) 2,197 3,429 6,618 9,734 20,769 24,387 35,932 39,838 41,422 42,938

0

20,000

40,000

60,000

80,000 Production (MW)

Source: Solarbuzz (Q2, 2011)

Chart 1 Forecast of Worldwide Solar Photovoltaics Cell Market

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The chart below is the forecast for the thin-film photovoltaic battery market

(about 25% of the solar photovoltaics cell). The market size of the thin film silicon

market will shrink as a result of the low price trend of the silicon batteries and the

impact of low photoelectric conversion efficiency; First Solar (CdTe Solar Cell) will

continue to enforce the “copy smart” strategy to expand its product lines in emerging

markets and CIGS will seek to secure its markets;

2011 2012 2013 2014 2015

CIGS 1,128 2,027 2,465 2,233 2,595

CdTe 2,204 2,759 3,439 3,679 4,608

a-Si/uc-Si 3,818 4,404 4,775 2,521 2,030

0

5,000

10,000

15,000

Capacity (MW)

Source: Solarbuzz (Q2, 2011)

Chart 2 Forecast of Thin Film Photovoltaic Battery Market

2. Analysis of the external environment

◆ Italy:

● Until 2016, the government will set a budget of EUR 1.94 billion to

subsidize installations of large solar photovoltaic systems (installed after

June 2011) and subsidization is available for systems with power capacity of

up to 12.5GWp.

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● For the period from June to December 2011, the budget ceiling for system

subsidization is EUR 300 million for systems with power capacity of up to

1,200MWp; in 2012, the total subsidization amount will be lowered to EUR

280 million and the power capacity will become 1,490MWp for eligible

system subsidization.

● In addition to installation subsidies, the government also provides bill

subsidies for certain projects. For instance, a 5% project subsidy will be

available for systems installed in landfills, contaminated lands or small

towns with a population of 5,000 or less. EUR 0.05 per degree subsidy will

also be available for systems using solar modules instead of corrugated roof

sheets.

● The subsidy program also encourages use of solar modules and inverters

manufactured in Europe. For systems using 60% or more of components

made in Europe, a 10% subsidy is available and this will impact the sales of

modules manufactured in China.

◆ France:

● As the sun hours and sunlight strengths are different between south France and

north France, the FIT ranges from Euro 31.4 ~ 37.7 cents and the government is

pushing to install building-integrated photovoltaic systems and BIPV

development. FIT can go as high as EUR 50 cents, but the sun hours and

sunlight strengths are still less than that in Italy and Greece.

◆ Greece:

● For roof systems, FIT is as high as EUR 55 cents per degree. For large power

plants, FIT can go as high as EUR 50~ 40 cents. Greece has the highest FIT and

strongest sunlight strength, but due to ineffective administrative performance,

only 32MW of systems were installed in 2009.

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◆ US: The federal subsidy is based on federal taxes and needs to rely on state

policies

● Unlike Europe, the US relies mostly on ground power plants for power

generation and not much on systems installed on the roof of residential

buildings. The Federal Government will subsidize up to 30% of system

installation fees with ITC, or investment tax credit. The US was hit by the

financial tsunami in 2009 and most enterprises are still suffering from loss and

so the tax credit does not seem to work effectively. Thus, the government also

provide a cash subsidy for systems installed between 2009 and 2010.

◆ Japan: central and local governments will push the subsidy programs aimed to

drive explosive growth in the market

● In 2009, the central government reinitiated the installation subsidy program to

subsidize JPY70,000 per kw. Residents could sell back extra electricity and

after November 2010, the price per degree has increased from JPY$24 to

JPY$48.

● With all these initiatives (subsidy from both the central government and local

government, savings in electronic bills, selling back extra electricity), it is

estimated that some of the families can recoup the installation fees in 10 years

and this can also stimulate the market.

● After the 311 earthquake, the expectations for solar power continue to grow and

in terms of solar cells, their sales grew 70% in 2010 and are expected to

increase in 2011 as demands for household electricity are on the rise. However,

the development of solar power plants is not as smooth as expected.

Although solar cells are the most expected renewable energy, their

development is still directly affected by government policies. Maybe the market will

only develop with national subsidy programs in the end.

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The chart below depicts the solar cell distribution in the worldwide market:

Source: Energy Trend (2012)

Chart 3 2012 Distribution Forecast of Solar Cells in the World Market

The growth potentials of solar cells in the US, Mediterranean countries, China,

India, Korea and the Japanese markets are still very strong. The market size of the

Europe market is about 40~45%, while the US market and markets of some of the

Asia countries are expected to take off. Because of geographic advantages, the

Mediterranean countries are perfect for developing solar power systems and new

solar power markets will emerge over time. India has population of 1.2 billion and

foreign suppliers are eyeing this market. In China, with the 12th Five-Year Plan, the

Chinese government will infuse RMB4 trillion into the solar energy market and

hence, market growth is expected. For Japan, due to the 311 Earthquake, the

Japanese government will gradually transform from nuclear power to power by

renewable energy, and solar power will be the dominant power source. The solar cell

industry in Korea is currently under performing and this is because in Korea

emerging industries as well as their markets are first developed by the government.

After they reach the maturity stage in the product lifecycle, the industry will then

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target marketing products in foreign markets and compete with enhanced systems in

the markets.

Estimated from production in different countries, the competitive landscape

seems clear and in terms of production costs and photoelectric conversion efficiency,

Taiwan suppliers will directly compete with Chinese vendors.

2011 2012 2013 2014 2015

RoW (low-risk) 4,390 5,822 6,368 5,442 6,804

US (low-risk) 1,860 2,323 2,708 1,961 1,947

Southeast Asia (low-risk) 3,371 4,206 5,013 5,716 6,907

Germany (low-risk) 3,072 3,314 3,320 2,583 2,703

Japan (low-risk) 3,144 4,170 4,039 4,119 4,534

Taiwan (low-risk) 7,112 9,779 11,131 11,219 12,474

China (low-risk) 28,388 37,830 40,918 34,920 38,961

0

25,000

50,000

75,000

100,000(MW)

Source: Solarbuzz (Q2, 2011)

Chart 4 Distribution Forecast of Solar Cells in the Worldwide Market

Compared to China, the semiconductor and process technologies are the

strengths of Taiwan, but there is not much open space in Taiwan and the sunlight

strength does not remain fixed. Therefore, the market size is rather limited and it is

not suitable to develop silicon solar cells that require large areas. The sun-exposing

areas are fairly small within metropolitan areas in Taiwan and it is rainy most of the

time. This is, however, the perfect occasion for thin films as they feature long wave

and broad absorption area. Plus, the thin film technology can be applied in paints,

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fibers and construction materials. So, with proper marketing efforts, this product will

become popular in the consumer markets. The table below depicts the development

phases of the solar cell industry in China:

Table 1 Analysis of Solar Cell Development in China

PV Development

Stage in China 1950~1970 1980~2000 2000~2011

Industrial Size Industrial Capacity

~4.5MW

35MW Amorphous

Silicon Module and

3MW non-Silicon

Module in 2003

12GW in 2011, and 34%

of production capacity in

the world

Fields of Applications Military, Aviation,

Aerospace, Traffic and

Weather

No Electric Box Power

plan for the Eastern

Region

Export to Large Power

Plants in European

Countries

Technology Standard Sample Production for

Mono-crystalline

silicon; In-house

Development for

Mono-crystalline

silicon.or Joint

Development with

Japan

Purchase production

equipments of

Monocrystalline

Silicon and

Polycrystalline Silicon

solar cell from western

countries

Independent RD Capacity

Under Government

Support

Representative

Organizations

Institute of

Semiconductors,

Chinese Academy of

Sciences, General

Research Institute for

Nonferrous Metals

Ningbo Zhongyi LDK,

Suntech Power Holdings,

Yingli Solar, Trina Solar,

JA Solar

Source: Topology(2011)

There are more than 20 solar cell plants built in Jiangsu Province alone and the

reasons for close proximity are: 1) need talents with international perspectives; 2)

technology innovation and higher level of quality improvement; 3) high awareness of

the capital market; 4) suitable for establishing contact centers or alliances as all

governments in the world are emphasizing the solar cell industry; and 5) not just

competition among competitors, but also benefits will be produced from collaboration.

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The solar cell industry is listed as the development focus in the 12th Five-Year

Plan. The Chinese government also established the Golden Sun Program to develop the

western region for the industry as this region has large space and rich sunlight for solar

power plants. In terms of corporate funding, starting from Suntech Power, the trend of

overseas listing has begun in China and a list of solar cell manufacturers (at least ten

manufacturers including Suntech, LDK Solar, Yingli Solar, Renesola, JA Solar, and

Trina Solar) all rushed to go public in New York, the Nasdaq, and London. As for solar

cell manufacturers in Taiwan, none of them choose to go public in other countries.

2010 Status of CIGS Suppliers in the World – Japan and US suppliers can all

achieve 10% of photoelectric conversion rate and the leading US, Japanese, and

German brands are Global Solar (photoelectric conversion rate : 10%) Solar Frontier

(expected production capacity: 1G) and Q-Cells (photoelectric conversion rate: 13%,

highest in the world), respectively.

Table 2 Capacity Analysis of CIGS Solar Cell Manufacturers

CIGS Manufacturers (Country) photoelectric conversion 2010 Industrial Capacity

Global Solar(US) 10% 75MW

Stion(US) 11% 10MW

Nanosolar(US) 10~11% 115MW

MiaSolar(US) 10.4% 40MW

Wurth Solar(Germany) 10.4% 30MW

Solibro(Germany) 13.5% 50MW

Q-Cells(Germany) 13% 174MW

Solar Frontier(Japan) 13.1% 1.08GW

Honda Soltec(Japan) 13% 30MW

Scheuten(Netherlands) 11.4% 3.2MW

Source: IEK, ITRI (2011)

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III. Operational Status and Future Plans of Important Manufacturers

in the PV industry in Taiwan

To enhance global competitiveness, Taiwan manufacturers all engage in either

horizontal or vertical integrations. Even for Gintech Energy Corp, or the top

manufacturer in Taiwan, they still choose to move toward horizontal integration.

In general, the supply chains of the solar cell industry are classified as

upstream (materials, silicon ingot, wafer), midstream (battery and module), and

downstream (system, inverter, BIPV and other terminal products).

Polysilicon Silicon

Chip Cell Module System/Assembly

Solar

Grade

Silicon

Si Ingot &

Wafers

Wafer-based Solar Cell

-Mono-Si, Multi-Si, GaAs

Thin-film Solar Cell

-a-Si/m-Si, CIS,

-Dye Sensitized Solar Cell

PV

Modules

PV System -Inverter, BOS… PV Installation PV Product

Taiwan Polysilcon

Corporation

Formosa Silicon

Sun Materials

Top Green Energy

Technologies

Motech Industries

Incorporated

RUEI CHANG

6 companies

Sino American

Silicon Products Inc.

Green Energy

Technology Inc.

Wafer Works Corp.

Mospec

Semiconductor Corp.

Feng Yi

Optoelectronics

Technology CO.,

LTD

Motech Industries

Incorporated

Eversol Corp.

Solar City

Danen Technology

Corporation

Gigastorage Corp.

6 companies

Silicon Cell: Motech Industries Incorporated, E-Ton Solar Tech

Co., Ltd, Delsolar Co., Ltd, Neo Solar Power Corp., Gintech

Energy Corp., Neo Solar Power Corp., Solartech Energy Corp.,

Mosel Vitelic Inc., Big Sun Energy Technology Inc., TopGreen

Energy Technologies, Inc, Tainergy Tech. Co., Ltd, Unitech,

Ever Energy Company Limited, Sunrise Global Solar Energy,

Corum Solar, Guangzhou Systec Electron Technology Co.,Ltd,

Pan Jit International Inc, Lof Solar Corporation, Topcell Solar

International Co., Ltd, TSEC Corp.

Silicon Thin Film Cell: Green Energy Technology Inc.,

NexPower Technology CORP. , Sun Well Solar Corporation,

Aviso Tech Inc, BeyondPV Co.Ltd., Sunner Solar Co., Ltd.,

Kenmos Technology, SINONAR SOLAR

CIGS Cell: Green Energy Technology Inc., Sunshine PV Corp.,

PVNext Corporation., Jenn Feng, ACHEM

OPTO-ELECTRONIC , Nanowin Tech Co., Ltd, Taiwan

Semiconductor Manufacturing Company

Concentrator Photovoltaic: Visual Photonics Epitaxy Co.,

Ltd,Arima Optoelectronics Corp., Millennium Communication

Co., Ltd, Delta Electronics, Inc., EPISTAR Corporation,

Advanced Wireless Semiconductor Commpany, Arima

EcoEnergy Technologies Corp., Everphoton Energy Corp.,

Compound Solar Technology Corp, HARWARE, SOLAPOINT,

Green Source Technology Co., Ltd, Gye Tay, YA FEI SOLAR

DSSC: Tripod Technology, Everlight Solar, Chang hsing,

Formosa Plastics Group

Tynsolar Corporation

Apollo Solar Energy

Co., Ltd

Kinmac Solar

Gloria Solar Ltd.

Powercom Co., Ltd

ABENI

RITEK

Sintek Photronic Corp.

DJ Solar Company

PST Solar

ANJI Technology Co.,

Ltd

SolatGate Technology

Corp.

PAN JIT

INTERNATIONAL

INC.

Shane PU

China Electric Mfg.

Corporation

Suntop Solar Energy

Co., Ltd

Win Win Precision

Technology Co., Ltd

System: Motech Industries Incorporated, Delta Electronics, Inc.,

Top Tower Technology Co., LTD, Uniergy Engineering Co.,

Ltd, Sunpower Solar, Inc., Deniz Electric Glass Co., Ltd, JU

HUAN, Jin Hua Chen Metal Elvgneering Co., China Electric

Mfg. Corporation, Lawson Trandworld Inc., CSI Technology

Co., Ltd, Shane PU, Topco Scientific Co., Ltd, , Ton Yung

Power Technology Co., Ltd, PHOTOPOW, Pino Technologies

Co., Ltd., Tranergy Technology Co., Ltd, Ablerex Electronics

Co., Ltd, GAO FENG, Arima EcoEnergy Technologies Corp.,

Cock Rooster Lighting Co., Ltd, Jenn Feng, ENDEX

AUTOMATION, YANGYAU ENERGY, Bright Led Electronics

Corp., HIGH GASKET, Kenmec Mechancial Engineering

Co.,Ltd, AUO Solar, LiteON Green Technologies, Inc. ,

EverRich Energy Corporation , Green Energy Technology Inc,

Aviso Tech Inc, Atomtech Group, Sunner Solar

Product: Top Tower Technology Co.,Ltd, Strong & Young, Solar

Power, Taiwan Sun Energy Photoelectric Co., Ltd, Motech

Industries Incorporated, China Electric Mfg. Corporation,

Solarfocus Technology CO., Ltd, TUNG YU T. Y. , Solartron

Inc. Xu-Bang Technology Inc, KE YU, Shin Ho Electrics Co.,

ChenFull International Co., Ltd, YONG JU RI YAO,

Uni-Photon Co.LTD, Nanomars Technology, DENG YANG ,

YII CHERNG , SANE FORCE

Industrial Value Chain, Solar Cell Industry

Source: IDB, IEK, ITRI (2010)

Figure 5 Industrial Chain of Solar Cell Industry in Taiwan

UMC Group was the earliest manufacturer to vertically integrate its supply

chain. UMC Group first founded NexPower Technology Corp, or the thin film solar

module supplier for the midstream, and then entered into the fields of mass

manufacturing, sales and marketing. Its current production capacity is 100MW with

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a 9~10% photoelectric conversion rate; UMC Group later established Topcell Solar

International and Copartner, upstream solar cell suppliers for RD and mass

production of mono-crystalline silicon cells, multicrystalline cells and GaAs.

Then AUO and TSMC also bet on the thin film market and committed RD

resources for the market. AUO can manufacture CIGS modules by itself (but not yet

for product sales and distribution); TSMC set its CIGS plant in Taichung and the

timing for mass manufacturing is not yet clear.

The midstream suppliers are also starting to seek partners to enhance their

competitiveness. For instance, Gintech Energy Corp. CTCI Corp, Taiwan Fertilizer

and Mitsubishi Corp (Japanese Supplier) have established a cross-industrial and

collaborative alliance. This alliance capitalizes on channeling resources from CTCI,

lands from Taiwan Fertilizer, financial strengths and experience from Mitsubishi to

compete in the marketplace. In the future, the solar cell market will be the battlefield

for groups rather than individual manufacturers.

Additionally, Gintech Energy started its Zhudong plant in May 2011.

Construction for ZhuNan B plant has started and it is estimated that the total

production capacity of Gintech Energy will reach 2.2GW in 2013; Phoenix Silicon

International Corp plans to expand its production capacity to 1.2GW in 2011; Neo

Solar Power Corp has built an operation center in the Southern Taiwan Science Park

for operations in southern Taiwan and production capacity of this facility is expected

to grow from 3.4GW now to 1.6GW in 2011. Through share swaps, Sino-American

Silicon Products and Phoenix Silicon International Corp have entered into a strategic

partnership and they hope that with their vertical integration and strategic alliance,

they can enlarge their operation sizes and enhance their industrial advantages.

The Table below lists operational performance of major participants in the

supply chain. Terminal products are mostly export-oriented, and their sales are

subject to fluctuation in the international market, but the industrial structures and

environments are still health and complete.

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Table 3 Important Suppliers of the PV Industry in Taiwan/Average Size

/Average Profit (historical)

2012 2011

operating income

(in NTD$

1 millions)

Net Profit

Ratio(%)

operating income

(in NTD$

1 millions)

Net Profit

Ratio(%)

Taiwan TPSI Corp 33.73 -1,012.73 2,367 -73.77

Giga Solar 3,474 17.25 3,055 33.73

DARFON 13,034 1.72 12,375 1.30

Sino-American

Silicon Products 4,373 -54.14 14,856 2.88

Green Energy

Technology 9,836 -36.33 18,615 -12.73

Wafer Works 3,429 -19.40 5,158 1.61

Danen Tech 902 -84.17 3,869 -8.46

Gintech 13,966 -13.77 18,808 -8.44

Motech 10,210 -49.33 20,430 -12.01

E-Ton Solar 2,046 -87.84 6,729 -60.23

Neo Solar Power

Corp. 12,271 -34.01 20,576 -14.08

Solartech Energy

Corp 6,137 -29.59 12,153 -10.10

Tainergy Tech 3,497 -41.56 3,952 -15.25

Powercom 2,004 -55.46 3,241 -41.85

Source: MOPS

(I) Advantages of the PV industry

◆ Complete supply chains, talent pools, and industrial clusters for the midstream

and upstream sectors in the PV industry in Taiwan.

◆ Taiwan is one of the top four PV production countries; the industry expands

rapidly and can provide excellent environments to develop intelligent PV

automation technologies.

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◆ Silicon chips: solid semiconductor manufacturing and technology management

experiences are available and these experiences can be applied to production

process of silicon chips (components for solar cells) to lower production costs.

◆ Solar cell: rich talent pools of semiconductor professionals are available and the

barrier for entering into the silicon chip and solar cells is very low.

◆ Industrial end: domestic suppliers are very flexible and can raise capital and

expand capacity very fast and this is very beneficial to capitalize on the first

mover advantage and the professional division model is very helpful to increase

production benefits.

(II) Opportunities of the PV industry

◆ Domestic suppliers can rapidly expand their production capacity and demands

for PV equipment can be enlarged. Also, to solve the issue of talent shortages,

domestic suppliers have high demands for production automation. Automation

equipment from overseas vendors are expensive and user-unfriendly and their

lead time is very long and service efficiency is very low. So, they are not popular

among domestic suppliers.

◆ Industrial end:

● Continuous development in the global market

● Applications of architectural integration can be seen as demands in a different

market

● Use downstream module suppliers to perform supply chain consolidation and

integration.

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The table below details the subsidy policies from the government in Taiwan to

encourage installations of distributed PV systems in private properties.

Table 4 Subsidy Policies for Solar Cells

Item Descriptions of PV initiatives in Taiwan

Subsidy for

Equipment

Highlights of subsidizing installations of PV systems

Condition: applies to only new systems with a capacity of no less than 1 kWp

Subsidized amount: maximum of NTD$150,000 for every kWp and the subsidized

amount shall not exceed 50% of total system installat ion fees. Government

branches, schools and public hospitals located in offshore islands and remote

locations can apply for subsidies of Solar photovoltaic power generation

system for use in emergencies and disasters via municipalities, county or city

governments from Bureau of Energy:

1. for independent systems, the maximum subsidy is NTD$350,000 for every kWp

2. for emergency and disaster prevention systems (hybrid models), the maximum

subsidy is NTD$400,000. After review, if the system provides benefits

associated with disaster prevention, energy benefits, and demonstration effects,

applicants can receive the full balance and it is not subject to restrictions from

the first point.

Subsidy for

Electricity

Consumption

Renewable Energy Development Regulation:

In case the device generates electricity with renewable energy, if the device

capacity is less than 500W, then the device is not subject to articles 97, 98, 100,

101 and 103 in the Electricity Act

Except articles 8, 9 and 14 which have different regulations of renewable energy

power generation devices, the Electricity Act applies to installations, projects,

operations, monitoring, registration and management of the renewable energy

power generation devices.

Taipower Corp. buy back regulation for electricity generated using renewable

energy – the buy back rate is NTD$2 per degree and this applies until the

following conditions occur:

1. announcement of regulations governing development of renewable energy

2. the power generating devices (using renewable energy) for which the

purchasing contract of electricity buy back is signed under has power capacity

of 600,000 W

3. the Electricity Act is revised and published and Taipower Corp has completed

privatization

Practices of

Tax Credit as

Industrial Promotion Regulation: A tax credit of 5~20% of device installation fees

will be provided to companies investing in clean energy devices, and the tax credit

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Item Descriptions of PV initiatives in Taiwan

Subsidy is valid for five years from the first year of request application

35% of corporate RD expenditures and employee trainings expenses; the tax credit

will be valid for five years from the first year of request application; if the RD

expenditure of the year of subsidy application exceeds the average of the

expenditures from the previous two years or the training expense of the year of

subsidy application exceeds the average of the training expenses from previous

two years, 50% of the exceeded amount can be subsidized.

The remaining tax credit from the last two points can be used in the subsequent

years, but the amount subsidized shall not exceed 50% of the total income tax

* Regulations on Production Promotion will be terminated on December 31st,

2009. Considering the needs of economic and industrial developments for

industries in Taiwan, the Executive Yuan and Ministry of Economic Affairs will

replace the Regulations on Production Promotion with Statute for Creating New

Value for Industries (Draft) to continue the stimulating role of the Regulations

on Production Promotion

Source: Executive Yuan (2011)

Demands and development of renewable energy (especially solar energy) are

the important trends in the international community. The worldwide solar power

systems installed in 2012 reached 32 GW in capacity and the industrial production

exceeded USD$118.5 billion. That figure is expected to reach USD$160 billion in

2014. In merely five years, Taiwan has become the second largest PV production

country in the world.

The industrial production of the PV industry in Taiwan reached NTD$122.8

billion in 2012, or an 27% decline from 2011. There are 135 PV suppliers and 20,000

workers are employed in this industry. The industrial production of the PV

equipment industry reached NTD10.4 billion in 2012 and the self-sufficient ratio

was 30%. Among domestic PV suppliers, Motech, Gintech, Neo Solar Power Corp.,

Solartech Energy Corp and DelSolar expanded their production capacity to 3.4Gw or

higher in 2010 and they invested in 14 production lines that are worth more than

NTD$4.2 billion. In 2011, the total industrial capacity is expected to expand to more

than 8GW with NTD$30 billion and the number of production lines will grow to

more than 300. About 50% of the production lines are manual production lines and

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the automatic retrieval and transfer and inspection modules is about 15~20% of the

original turnkey equipment cost.

Because the demands in the solar energy market continue to grow and the

trend – rapid market expansion and demand creation through low product prices –

has become clear, known suppliers (such as J&R, ACI, ABB from Europe) and

developed countries such as Japan are actively developing automation production

technologies to lower their reliance on human labor, to increase throughput and

equipment utilization rates and to achieve the goal of doubling the per capita output

level. However, automation equipment from overseas vendors are expensive and

user-unfriendly and their lead time is very long and the interfaces are hard to

integrate. These combined drawbacks cause high breakage rates or production

interruptions. Moreover, the low service efficiency of the distributors make them

ineffective to address user issues. So, they are not popular among domestic suppliers

and users are very negative about these systems. Another issue is that most domestic

suppliers are looking to expand their capacity to GW. They have a lot of production

lines and handle a large quantity of base substrates. Tests on the defectives and

electric property are usually conducted offline. The online tests and production lines

are very difficult to integrate, causing low production capacities and low yield rate.

Furthermore, Turnkey equipment and manual production lines are adopted in the

plant and wafer thickness is reducing from 200μm to 160μm. Because of these

factors, the chance of artificial pollutions and breakage rates become very high

(current breakage rate: 3%). Thus, increasing production capacity for individual

production lines and yield rates are urgent issues suppliers need to address first

before their competitiveness can truly be enhanced.

Currently, the production capacities of Taiwanese suppliers and Chinese

suppliers together make up 50% of the global capacity, but whether it is extracting

silicon materials or manufacturing equipment, our standards and qualities are still far

behind developed countries including Japan and western countries. What Taiwan has

is the quality semiconductor process technologies. If this can be combined with the

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strengths of China (one stop shop, great bargaining power to lower material prices

with orders of large quantity) to expand production capacity, enhance the

photoelectric conversion rate, to cut down shipping cost, to lower production cost

with effective HR management skills and to offer cheaper but more effective PV

products, then the results will be far better than if Taiwan and China are to go

different ways.

Taiwan has a complete industrial chain of silicon solar cells and industrial gaps

are mostly found in other emerging processing technologies (ex. CIGS research and

development) and new applications (BIPV module). Major cities in Taiwan have

their urban renewal plans in place and the overall environments are very complete.

Thus, these conditions make Taiwan an ideal destination for developing

international trades and BIPV systems foreign investments.