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Wafer trends for 2020: Transitioning to larger size

156.75mm (M2) wafers has become the mainstream size in the industry since 2017. However, the improvement of cell efficiency appeared to hit a bottleneck in the following year, making wafer size again a hot topic among manufacturers. In the second half of 2018, 158.75mm (G1) mono wafers were introduced to the market successfully. Having gained momentum, it’s certain that G1 format will be the mainstream in 2020 to 2021. To differentiate products and reduce costs associated with crystal pulling, wafer manufacturers launched 166mm (M6) and 210mm (M12) wafers. With more variables in the market, most manufacturers are now in a wait-and-see mode on wafer size.

Development overview in 2019

In the first half of 2019, some Tier-1 module makers started promoting G1 wafer, with vertically integrated company Jinko Solar taking the lead, followed by JA Solar and Trina. For cell makers, Tongwei and Aiko Solar had both released shipment of G1-sized cells and increased its volume each month.

With wafer size going bigger in the second half of 2019, Longi acted first to launch M6 wafers, while Zhonghuan Solar introduced M12 to gain competitive edge. Meanwhile, overseas manufacturers such as LG and Hanwha Q Cells, who have adopted 161.7mm (M4) format earlier to distinguish themselves from Chinese rivals, are yet to decide the wafer size for their next-generation products. Having said that, most manufacturers have adopted G1 size for mono-Si wafer and begun producing such products in the second half of 2019. However, G1-sized products were predicted to take up a mere 12% of share in 2019, because it takes time for end users and developers to test and evaluate modules applying larger wafers and most PV plants confirmed in early 2019 will mostly use M2-sized products.

Capex requirement and technological barrier facing larger wafers

Scrutinizing M6 wafer, G1 and M6 shares the same diameter, but slicing ingot into M6 size can generate larger wafer surface area, and hence better price performance. Therefore, Longi has actively promoted M6 wafer and offered prices with a competitive advantage over G1, in the hope to attract more manufacturers to follow suit. However, apart from Longi and its partnering cell companies, other mono-Si manufacturers are uncertain about switching to M6. At present, these makers only accommodate new lines with M6 wafer and produce once orders are placed. Rationale behind the conservative attitude are high implementation barriers, which require large cell and module equipment modification, as well as high capex requirement – more than two to three times more expensive than that required by adopting G1. On the other side, both Canadian Solar and GCL-Si adopted M6 size for their multi-Si and cast-mono wafers.

There are technological barriers associating with the application of M6 and M12 format, especially the manufacturing process of wafer and cell. For wafer makers, the fragmentation rate of larger wafer is higher during the thinning process. In terms of cell manufacturing process, uneven surfaces might occur during texturing and coating process, and result in a slight decrease in cell efficiency.

Strong price performance of mono products accelerates withdrawal of multi products from the market

After adopting larger wafer and module techniques, mono PERC modules are increasingly edging out multi-Si products for its’ ability to deliver competitive performance. Consequently, demand for multi-Si products weakened significantly in October 2019, with multi-Si cell prices falling sharply to a new low – hitting USD 0.079/W in mid-December. While sending ripples to the wafer and polysilicon segments, the weak cell price also caused the price of multi-Si module to decline. Despite the low price, demand for multi-Si products is not likely to recover this year due to widened gap, which results from significant improvement in wattage output and price reduction of mono-Si products. Taking 72-cell module for example, the mainstream wattage output of mono modules will achieve 390-400W, whereas that of multi modules may hover at 340-350W even using larger wafer and half-cut technique. With only 50W of wattage gap and a price difference of USD 0.03-0.04/W, multi modules are no longer appealing to end users.

Cast mono product, having gone into commercial production in 2019, is facing more pressure from mono-Si wafer, which has achieved further price reduction this year. Against this backdrop, the development of cast mono will depend on the price difference between polysilicon price for mono- and multi-Si wafer this year.

In terms of size format, it’s difficult for older multi-Si wafer and cell production lines to upgrade to M6. Moreover, demand for multi-Si product continues to weaken while multi-Si cells are no longer profitable. Thus, manufacturers are unwilling to upgrade existing lines or expand capacity. In fact, these producers have started converting lines from multi-Si to mono-Si, and those with older production lines may withdraw from the market. It’s expected that the share of multi-Si product will decrease to less than 20% this year.

Market prospect

Forecast on wafer size transition

Standardization of the wafer size is necessary for manufacturers to obtain economies of scale and cost advantage. A monopoly market with only a few larger wafer suppliers would be an unfavorable outcome for downstream sector.

Before achieving standardization, PV InfoLink projected that four different wafer sizes will remain in the market this year. G1 mono wafer is expected to remain mainstream, taking up to 60% of the share, whereas M6 wafer will be steadily gaining ground, with its share growing to 13%.

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