Asia Tech Wire (June 12) -- The U.S. anti-dumping and countervailing investigations into China's PV industry are being repeated in Southeast Asia.
Since 2011, the U.S.es has conducted anti-dumping and countervailing duty (AD/CVD) investigations into Chinese solar cells, imposing high tariffs on these products in 2012.
In 2014, the U.S. expanded its investigation to cover all crystalline silicon photovoltaic (PV) products.
Facing these sanctions, Chinese companies turned to Southeast Asia to export to the European and American markets, achieving considerable success.
However, recent U.S. AD/CVD investigations into four Southeast Asian countries (Cambodia, Malaysia, Thailand, and Vietnam) pose new challenges for Chinese PV companies.
As the investigation progresses, many PV companies have been revealed to be closing some of their Southeast Asian factories.
For example, Longi Green Energy is gradually shutting down its factory in Malaysia, and its Vietnam cell production lines have ceased operations. And Trina Solar's production lines in Thailand are scheduled to stop around mid-June.
Despite the pressure, Longi founder Li Zhenguo stated that the complete shutdown of PV capacities in Southeast Asia still requires evaluation. He said the company is also considering keeping these capacities as backups.
Since 2015, under the backdrop of U.S. AD/CVD investigations, Chinese PV companies like JinkoSolar, Longi, Trina Solar, JA Solar, and Canadian Solar have established factories in Southeast Asia.
Favorable natural conditions and policy support in Southeast Asia have made it an important capacity base for Chinese PV companies.
However, the U.S. AD/CVD investigations may hinder the path for Chinese companies to export to European and American markets through Southeast Asia.
As of the end of 2023, Southeast Asia had 59.8GW of PV cell capacity and 90.6GW of module capacity, accounting for 9%-10% of global capacity, mainly in Malaysia, Vietnam, and Cambodia.
Chinese companies' cell and module capacities in Southeast Asia exceed 50GW, with an additional 26GW of wafer capacity.
The expansion of production capacity of Chinese enterprises are mainly concentrated in Malaysia, Vietnam, Thailand, all in the U.S. list of investigations, which means that the road for Chinese enterprises to enter Europe and the U.S. through Southeast Asia, narrowed.
Meanwhile, the Chinese PV industry faces overcapacity and price reduction pressures.
In 2023, the total output value of the Chinese PV manufacturing industry exceeded 1.7 trillion yuan, but the prices of main products declined significantly, and exports showed a trend of "increasing volume but decreasing price."
Companies like Longi saw limited revenue growth and significant drops in net profit in 2023. In the first quarter of 2024, PV companies generally experienced poor performance, with significant declines in both revenue and profits.
Despite these challenges, Chinese PV companies need to continue exploring overseas markets. In 2023, the overseas revenue of Longi, JinkoSolar, Trina Solar, JA Solar, and Canadian Solar accounted for 37.48%, 62.66%, 43.15%, 54.48%, and 70.48% of their total revenue, respectively.
Chinese companies are seeking new ground for development, such as Indonesia and the Middle East.
The Indonesian government and international partners are promoting renewable energy cooperation, signing a memorandum of understanding with Singapore to promote the import and export of low-carbon electricity.
In the Middle East, TCL Zhonghuan and Vision Industries are collaborating on a crystal wafer project in Saudi Arabia; JinkoSolar has signed a module agreement with a Saudi company; and Longi participated in the construction of a number of PV power plants in Saudi Arabia.
As the U.S. increases its investment in domestic PV supply chains, Chinese companies are also starting to set up manufacturing capacities in the U.S., such as Trina Solar and JA Solar establishing factories there.
Overall, Chinese PV companies must address policy risks and seek diversified international market layouts to deal with future uncertainties and challenges.
