Industry Insight

Taiwan’s NexPower Eyes Expansion in Shandong

1 June 2010

Taiwanese companies are rapidly increasing their presence in China's Shandong province, a key market for thin film installations.

By Paul French in Shanghai

Taiwan’s NexPower Technology Corporation is reportedly planning to build a thin film plant in China’s Shandong province.

Additionally, NexPower is also exploring possible system installation projects in conjunction with the Shangdong provincial government.

This announcement by another Taiwanese thin film manufacturer of significant expansion across the Taiwan Straits into mainland China follows on from a number of other Taiwan PV companies ramping up production and expanding into China.

Their entry route follows a similar trajectory to the expansion of the island’s hugely successful semiconductor industry by keeping R&D in Taiwan and moving production capacity to the PRC.

NexPower was founded by one of Taiwan’s leading integrated circuit (IC) foundry providers, UMC Group.

Since 2005, NexPower has been developing silicon thin film applications with the intention of becoming a world class thin film solar cell manufacturer.

With significant investment from UMC, NexPower has already ramped up to 60MW at its Taichung County plant in central Taiwan. Planned capacity of 100MW is forecast by the end of 2010.

As part of its further expansion NexPower is discussing construction of a 35MW amorphous silicon (a-Si) thin-film PV module plant in Shandong.

According to the Taiwanese media, NexPower’s initial investment in the plant will be approximately US$90 million, with construction of the facility set to begin in 2011.

NexPower does need to expand. The current capacity at its Taiwan plant (60MWp) was achieved in January and will soon reach the plant’s ultimate capacity of 100MW by December.

Approximately 50% of capacity is micromorphous tandem-junction PV modules, a specialization of several Taiwanese thin film manufacturers including BeyondPV and Auria Solar.

The expansion is all the more necessary if reports in Taiwan’s newspapers that NexPower has already received orders to supply 70MW of PV modules for three power plants in Shandong are true.

These reports suggest that shipments of the PV modules to Shandong are starting imminently.

However, it should be noted, these orders have not been officially confirmed by either the Chinese media or officials in Shandong.

However, Shandong is currently China’s leading province when it comes to the installation of PV.

Dezhou, in north western Shandong claims to be China’s first ‘solar city’ and is a centre for the burgeoning domestic solar industry.

Dezhou is home to two major domestic solar manufacturers, Himin Group and Ecco Solar Group.

Dezhou’s local authorities are keen to support the regional solar-related industry (there are over 100 enterprises now registered as being in the solar technology sector in Dezhou) and the city hosted the 2010 International Solar City Congress (convened in the sundial-shaped Sun-Moon Mansion powered by 50,000 square feet of solar panels providing 95% of the building's energy needs) while the local government has adopted the name ‘Solar Valley City’ for the region.

Dezhou claims that 800,000 people are now employed in the solar industry - one in three people of working age.

Of Dezhou’s 5.5 million population, most living in the new town use solar heating while approximately 90% of homes in the old city have solar heating

Meanwhile in southeastern Shandong, not far from Dezhou, is Rizhao which started using solar energy early due to a number of pioneer Chinese solar companies setting up in the area and generous grants from the local government to encourage people and businesses to install solar energy systems.

Rizhao has dubbed itself China's “sun city,” and claims 99% of households in the central districts use solar water heaters, while Rizhao’s lighting and traffic signals are powered with PV power.

The city has been awarded China's “Environmental Protection Model City” and claims to have reduced carbon dioxide emissions by almost 53,000 tons per year.

However, the domestic manufacturing market is also concentrated in Shandong - Himin Group and Ecco Solar, as mentioned above, as well as a host of others, such as Shandong Sunvim Solar Technology – all ramping up production to compete with NexPower.

At present Taiwanese R&D is ahead of mainland China’s but this leadership is not guaranteed.

Without doubt the biggest potential problem for Taiwanese thin-film PV technology manufacturers during this period of initial expansion into mainland China, and internationally, is securing financing for system installations and production ramp ups.

Many analysts remain bearish on thin-film PV technology, considering it overly expensive and less technically developed than alternative competing solar solutions. Financing is certainly required if Taiwanese thin-film PV manufacturers are to expand and NexPower may be in a better position than many due to its relationship with UMC Group.

UMC is Taiwan’s largest semiconductor company employing approximately 12,000 people worldwide and has offices in the United States, Europe, Japan, Taiwan, and Singapore.

And with this in mind, let´s not forget that UMC has deep pockets and appears committed to boosting NexPower’s position in the thin-film PV sector.

To respond to this article, please write to:

Paul French: paul@accessasia.co.uk

Or write to the editor:

Katherine Steiner-Dicks: steinercommunications@yahoo.co.uk