The US Department of Commerce announced the preliminary determination of anti-dumping duty review on Taiwanese cells. The highest tax rate of 11.45% and the lowest tax rate of 27.55% have been reduced to 3.5% and 4.2%, respectively, for Taiwanese manufacturers. The original duty rate of 19.5% has been lowered to 4.09% for other manufacturers. One of the respondents, SAS Group (Sunrise and Solartech) got the lowest duty rate of 3.5%. Also, SAS Group has the largest PERC cell capacity in Taiwan as well as their own module brands, making SAS Group the biggest winner this time. Meanwhile, NSP and Tainergy can only use the tax rate of 19.5% from last year since they didn’t participate in the review this time. They can only accelerate product differentiation deployment in third-party countries to gain more market share.According to EnergyTrend’s observation, many top-tier Chinese makers with vertical integration capability have built zero-duty-rate capacity in Southeast Asia over the past two years. Under the circumstances where there are many choices for multi-Si products in third-party countries and the average price of utility-scale power plants has been lowered to US$ 0.35-0.37/W in the US, there may not be many advantages if competing with zero-duty-rate capacities in third-party countries.
After mono-Si and mono-Si PERC products became popular at the US exhibition last year, top-tier Chinese makers have increased their PERC cell shipment to the US significantly in 4Q16. So far, mono-Si as well as PERC capacities in third-party countries are slowly growing. The total mono-Si PERC capacity with zero-tax-rate hasn’t surpassed 2GW for SolarWorld, Hanwha Q-Cells, and REC Solar, putting Taiwan in a better position to promote mono-Si and mono-Si PERC products owing to low tax rate. Mono-Si PERC still cost US$ 0.38-0.45/W in the US residential market. Calculating from the duty rate of 3.5-4.2% in Taiwan, module will have room to grow if manufacturers can ship out their own modules. But if relying on low tax rate, it can only bring short-term advantages for high-efficiency cells. The competitiveness will gradually decline following the expansion of mono-Si and PERC capacities in third-party countries. Therefore, low duty rate is just a recent transition.
Looking back over the past few years, Taiwanese manufacturers have lost their opportunities in developing module brands when there was no/low anti-dumping duty, leading to lower competitiveness for Taiwanese makers as capacities increased rapidly in third-party countries. Not just downstream sectors went through ineffective development, but also upstream sectors couldn’t consolidate their mono-Si wafer sources, resulting in high efficiency and quality for cells but limited profit. In the future, aside from thinking about mono-Si and PERC capacities and how to bring efficiency into full play, Taiwanese manufacturers have to be more determined in developing downstream products. Otherwise, if only relying on cell shipment to the US, PERC cell prices may have to be cut substantially for top-tier module makers to solidify their processing profits. As a result, manufacturers can’t just think about the short-term benefits for low tax rate, but think about long-term strategies.