Japanese material producers are in the process of shrinking the solar battery business greatly due to the rapidly decreasing prices of Chinese products. Three Japanese companies including JX Nippon Mining & Metals decided to dissolve their joint venture in the silicon business and allocate extraordinary loss of about 13 billion yen. Chinese silicon producers participated in the Japanese domestic market in 2010 with low-priced products. The market price of silicon is 15 dollars per ton, less than one tenth of the price in 2008. The joint venture decided to withdraw from the business because it cannot work out solutions to recover the profitability. Tokuyama will also record net loss of 41 billion yen due to its stagnant silicon business in fiscal ending March 2013.
European Photovoltaic Industry Association reported that worldwide generation capacity of photovoltaic generation increased 40% over the previous year to exceed 1,000,000 kW at the end of 2012. The increased generation capacity is about 30 million kW that is equivalent to the generation capacity of 30 nuclear power plants. Worldwide production capacity of silicon is expected to become 450,000 tons due to the participation of Chinese producers, while demand for silicon remains at about 200,000 tons. As if often the case, lots of companies rush into profitable products to decrease the profitability drastically, and small- and medium-sized producers are wiped out from the market. Do not pursue economy of scale to compete with inexpensive products. Strenuous efforts to streamline production to reduce production cost are not rewarded. The only solution to recover profitability in the market dominated by inexpensive products is to increase the competitive edge and launch products that can be sold at higher prices.
Worldwide capacity of photovoltaic generation is increasing quite rapidly