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Another dark horse runs through the whole solar industry supply chain

As a solar “dark horse” that has emerged in recent years, while the silicon wafer business is rapidly developing, Shangji Automation is continuously advancing into the downstream cells and modules, increasing the extended layout of integrated production capacity.

Shangji Automation
Shangji Automation

Recently, Shangji Automation plans to invest RMB 5 billion yuan to supplement its module business. On April 5, it announced to establish a project company to invest in the construction of a solar module project with an annual output of 16 GW in Jiangyin Lingang Economic Development Zone, with an estimated total investment of RMB 5 billion yuan.

The project is planned to be implemented in two phases, with first 5 GW of solar modules, totaling approximately RMB 1.5 billion yuan, which is expected to be completed and put into operation in the third quarter of 2023. The second is to produce 11 GW of solar modules with about RMB 3.5 billion yuan, and the project construction time is yet to be determined.

After completion, the solar production capacity of Shangji Automation will cover the four major links in the industrial chains. The company will also form an integrated industrial chain pattern. It should be pointed out that it also stated that there is a certain funding gap in this investment project. As of the end of last year, the company had approximately RMB 4 billion yuan of available self owned funds, with asset liability ratio of 40.5%.

The company, founded in 2002 and entered the solar industry in 2004, mainly engaged in solar diamond wire slicing machines. In 2019, the company officially transitioned from silicon wafer equipment to the main solar industry chain, expanding its mono crystalline silicon production business, and established a wholly-owned subsidiary, Hongyuan New Materials, to invest in the construction of 5 GW annual mono crystalline silicon pulling production project in Baotou, with a total investment of approximately RMB 3 billion yuan.

In the following years, Shangji Automation rapidly expanded capacity, with mono crystalline silicon business achieved explosive growth, an important support for the company’s revenue. From 2019-2021, the company’s silicon wafer sales revenue was RMB 253 million yuan, RMB 2.73 billion yuan, and RMB 10.753 billion yuan, respectively. By 2021, its silicon wafer business accounted for 98.5% of its revenue, with a silicon wafer production capacity of 30 GW, becoming a “super dark horse” that has emerged in silicon wafers in recent years.

From 2019-2021, the stock price of Shangji Automation has created over 20 times increase within two years. In fact, in order to avoid the risk of a single source of revenue, Shangji Automation began to explore new business in 2022, continuously expanding upstream and downstream investments in the solar industry chain, and expanding into silicon materials and solar cell business.

In March 2022, Shangji Automation invested a total of RMB 11.8 billion yuan in the construction of an annual 150,000 tons of industrial silicon and 100,000 tons of high-purity crystalline silicon project in Baotou City. In June 2022, the company poured RMB 14.8 billion yuan to construct an annual 40 GW of mono crystalline silicon and supporting production projects. In August 2022, the company once again announced to invest RMB 15 billion yuan to Xuzhou New Energy Industrial Park project, which includes an annual 25 GW of mono crystalline silicon wafers and 24 GW of N-type high-efficiency crystalline silicon cells. While expanding the existing industrial scale, they also expanded the production capacity of N-type cells such as TOPCon and heterojunction. In addition, the company has also jointly built a 300,000-ton granular silicon project with GCL Technology.

According to its latest disclosed data, in 2022, the shipment volume of Shangji Automation’s mono crystalline silicon wafers was 31.18 GW, an increase of about 79% year-on-year. As of the end of last year, the company had a mono crystalline silicon capacity of 35 GW.

By 2024, Shangji Automation will have an annual industrial silicon production capacity of 15 GW, 130,000 tons of silicon material, 75 GW of silicon pulling, 75 GW of wafers, 24 GW of N-type cell, 16 GW of modules, and 5.5 GW of new energy power station. The entire industrial chain layout of Shangji Automation has officially taken shape.

At present, in the field of solar silicon wafers, Longi Solar and TCL Zhonghuan still maintain their position as “duopoly”. As of the end of 2022, Longi Solar’s capacity in mono crystalline silicon wafers has reached 150 GW, 140 GW for TCL Zhonghuan, and only 35 GW for Shangji Automation.

According to its latest plan, by the end of 2023, Shangji Automation will have a silicon wafer capacity of 70 GW, and will continue to increase to 100 GW.

However, Shuangliang Eco-Energy is also catching up. The company’s previous Phase II 40 GW silicon wafer project may be completed with actual 50 GW. Last September, it once again announced to invest in 50 GW of silicon wafer production. After subsequent production, its total silicon wafer capacity will reach 100 GW, with 5 GW of modules and newly added 20 GW in Baotou.

By 2022, Jinko Solar has 65 GW of wafers, 50 GW for GCL Technology and 40 GW for JA Solar. The silicon wafer market will still maintain a “duopoly” pattern, and the competition between second tier silicon wafer enterprises will become more intense.


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