Chinese Solar Firms Bleed Losses Amid Worsening Glut and Falling Prices

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Overcapacity in the photovoltaic industry has intensified, leading to significant price drops across the main manufacturing stages

China’s solar manufacturers have seen their bottom line severely hit by a deepening industry glut that has triggered a brutal price war.

Several companies published first-half results on Friday, showing worsening profitability as the industry grapples with plunging prices. Longi Green Energy Technology Co. Ltd., China’s largest solar wafer producer, reported a net loss of 5.2 billion yuan ($732 million) for the first six months, a sharp reversal from the 9.2 billion-yuan net profit recorded a year earlier.

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Chinese solar manufacturers are facing a severe industry glut, causing a drastic price drop and widespread financial losses.
Major companies such as Longi Green Energy, Tongwei, and JA Solar reported significant net losses for the first half of 2023.
Prices of polysilicon, silicon wafers, solar cells, and modules fell sharply, with some companies suspending production due to lack of orders and cash flow challenges.

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Who’s Who

Longi Green Energy Technology Co. Ltd.: Longi Green Energy Technology Co. Ltd., China's largest solar wafer producer, reported a net loss of 5.2 billion yuan ($732 million) in the first six months of the year, a sharp contrast to the 9.2 billion-yuan profit from the previous year. The industry's deepening supply-demand mismatch has driven prices below production costs, causing operational difficulties. Recently, Longi raised wafer prices slightly to address the ongoing price war.

Tongwei Co. Ltd.: Tongwei Co. Ltd., a solar silicon supplier, reported a net loss of 3.1 billion yuan in the first half of the year. The company is facing operational challenges due to a supply-demand mismatch and price drops in the photovoltaic industry. Tongwei mentioned that some companies have suspended or reduced production because of a lack of orders, inventory build-up, and financial strain.

JA Solar Technology Co. Ltd.: JA Solar Technology Co. Ltd. reported a net loss of 870 million yuan for the first half of the year due to a severe industry glut and plunging prices in the photovoltaic sector. The mismatch between supply and demand has driven prices below production costs, impacting profitability across the industry.

JinkoSolar Holding Co. Ltd.: JinkoSolar Holding Co. Ltd. is a solar module manufacturer that remained profitable amid the industry glut, though its first-half profit in 2023 slumped 69% year-on-year to 1.2 billion yuan. This decline highlights the severe impact of the ongoing price war and overcapacity in the photovoltaic sector.

Trina Solar Co. Ltd.: Trina Solar Co. Ltd. reported an 85% profit plunge to 530 million yuan in the first half of the year. The company has been affected by the widespread overcapacity and falling prices in the photovoltaic industry, leading to operational difficulties and reduced profitability.

TCL Zhonghuan Renewable Energy Technology Co. Ltd.: TCL Zhonghuan Renewable Energy Technology Co. Ltd. was mentioned in the context of raising wafer prices alongside Longi in an attempt to counteract the industry's severe price war and overcapacity issues. However, no specific financial details or further information about TCL Zhonghuan Renewable Energy Technology Co. Ltd.'s performance or impact was provided in the article.

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