Greentech Media Poly Webinar Feb 2012final

8/3/2019 Greentech Media Poly Webinar Feb 2012final

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Polysilicon 2012-2016:

Supply, Demand & Implications for the Global PV Industry

Webinar on February 9, 2012

Moderator:Carolyn CampbellResearch [email protected]

Speaker:

Brett PriorSenior [email protected]


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http://www.greentechmedia.com/research/report/polysilicon-2012-2016

200+ Pages120+ Company profiles

90+ Charts, Tables, and IllustrationsHistorical and forecast capacity, cost, and price from 2008-2016
http://www.greentechmedia.com/research/report/polysilicon-2012-2016http://www.greentechmedia.com/research/report/polysilicon-2012-2016http://www.greentechmedia.com/research/report/polysilicon-2012-2016http://www.greentechmedia.com/research/report/polysilicon-2012-2016http://www.greentechmedia.com/research/report/polysilicon-2012-2016http://www.greentechmedia.com/research/report/polysilicon-2012-2016http://www.greentechmedia.com/research/report/polysilicon-2012-2016


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1. Polysilicon Overview2. Comparison of Polysilicon Production

Technologies3. Polysilicon Supply and Demand 4. Polysilicon Economics

Why should you care about the cost of polysilicon?Because lower poly prices and higher module efficiency will shave ~$0.20/W off the cost of a c-Si module in 2012 alone

Forecasts included in the full report

Forecasts included

in the full report

Numbers look too low?Here are the 3Q11 results:

Trina

$0.65/W non-silicon cost $0.37/W silicon cost $1.02/W total cost

Best-in-class conversion

costs by step

Wafer $0.17/W (GCL) Cell $0.17/W (LDK) Module $0.28/W (CSI) Non-Si $0.62/W


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Solar PV manufacturing 101




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Polysilicon manufacturing 101




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Polysilicon industry is concentrated, could be considered abalanced oligopoly



HHI is measure ofindustry

concentration on ascale of 0 to 10,000(10,000 is amonopoly)

A market with an HHIless than 1,000 is

regarded ascompetitive

Poly industry is ~640


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Even with 22 GW of c-Si PV installed in 2011, there still remains significantoversupply at all stages of the value chain




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China, the US, and Korea are the 3 largest producers of polysilicon




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Costs that vary by technology include energy (~13%), and depreciation &interest (~48%)


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Energy use matters, and in this category FBR and UMG win


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But Capex (which determines Depreciation & Interest) is much more importantthan energy use, and on this metric Siemens HC and UMG take the cake


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Lower purity poly sells at a 10-30% discount to higher purity poly




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Excluding Depreciation & Interest, FBR is the cost leader


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But, when depreciation & interest are included, Siemens HC is the lowestcost option




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And on the most important metric, profit, Siemens HC again takes the gold




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Historically, capacity has remained close to total demand




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But in the last 4 years, capacity growth has outstripped demand growth, andthis imbalance may get worse before it gets better




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Profit margins are key to understanding where pricing is headed


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Spot prices are driven by cash costs, whereas contract prices have afloor set by total costs


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Since 2009, cash costs for poly have been reduced from ~$40/kg to


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Depreciation adds another $3-8/kg to manufacturing costs

REC FBR, $20GCL, $21

LDK, $27

Daqo, $22

$0

$20

$40

$60

$80

$100

$120

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 2012

PolyM

anufacturingCost,in

cl

d

epreciation($/kg)

Poly Manufacturing Costs (incl depreciation, excl SG&A), 2009-present


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Poly ASPs collapsed in 4Q 2011, falling over 40% at REC

REC, $57

REC, $35

GCL, $44

Daqo, $52

$0

$10

$20

$30

$40

$50

$60

$70

$80

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

PolyASP($/kg)

Poly ASP by Manufacturer, 2010-present

42%

drop

from 3Q

to 4Q


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EBITDA Margins have fallen from very attractive (50-70%) to toxic in just 4 quarters

REC, 51%

REC, 28%

Wacker, 39%

OCI, 70%

OCI, 34%

0%

10%

20%

30%

40%

50%

60%

70%

80%

1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11

EBITDA

Margin,

%ofrevenue

EBITDA Margin by Poly Manufacturer, 2008-present


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Including the impact of depreciation, EBIT margins are now approaching 0%

REC, 34%

REC, 4%

OCI, 57%

OCI, 6%

Daqo, 29%

0%

10%

20%

30%

40%

50%

60%

1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11

EBITMargin,

%ofrevenue

EBIT Margin by Poly Manufacturer, 2008-present


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What is next for the polysilicon industry?



Where is pricing headed?

When will the plant closures allow the supply/demand gap toclose?

The feast is over - which companies are best positioned to survive

this period of famine?


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Supply stack analysis can help to reveal the likely winners and losers, as well

as future pricing trends

Cost estimates for every operational poly

plant included in the full report


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Moderator:Carolyn Campbell

Research [email protected]

Speaker:Brett Prior

Senior [email protected]

Q&A

Documents

Greentech Media Poly Webinar Feb 2012final