Hindawi Publishing Corporation International Journal of Photoenergy Volume 2013, Article ID 794367, 11 pages http://dx.doi.org/10.1155/2013/794367 Research Article Competing in the Global Solar Photovoltaic Industry: The Case of Taiwan Yu-Shan Su National Taiwan Normal University, Taipei, Taiwan Correspondence should be addressed to Yu-Shan Su; [email protected] Received 23 November 2012; Revised 26 January 2013; Accepted 4 February 2013 Academic Editor: Ching-Song Jwo Copyright © 2013 Yu-Shan Su. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The top five solar cell supply countries in the world in sequential order are China, Taiwan, the United States of America, Japan, and Germany. The capacity of Taiwanese solar cell production is ranked top two in the globe. The competitive advantage of the Taiwanese electronics firms has facilitated the rapid developments to its solar photovoltaic industry. The Taiwanese solar photovoltaic industry possesses a large size and a complete value chain of upstream, midstream, and downstream sectors. In this study, I analyzed the trends and developments of the solar photovoltaic industry in Taiwan and in the globe. And I also investigated the positioning and competitive advantage of Taiwanese firms in the value chain of the global solar photovoltaic industry. I found that Taiwanese firms continue to have an important and indispensable role in the global solar photovoltaic industry by either differentiation or cost advantage. 1. Introduction billion, which accounts for 70% of all industry revenue in Taiwan; (2) the revenue of the upstream sector of the solar The shortage of global fossil fuels has led to many coun- silicon materials was approximately US$1.5 billion; (3) the tries prioritizing the developments of the long-lasting solar revenue of the downstream sector of the solar photovoltaic photovoltaic (PV) industry. The top five solar cell suppliers system was approximately US$283 million (see Figure 1) in sequential order are China, Taiwan, the United States of [1]. Currently, there are approximately 131 companies in America (USA), Japan, and Germany in the world [1, 2]. The Taiwan. Furthermore, a number of Taiwanese companies, capacity of Taiwanese solar cell production is ranked top two such as Motech Industries Incorporation, Gintech Energy in the globe [3]. The competitive advantages of Taiwanese Company, and Neo Solar Power Corporation, are on the top electronics firms have facilitated the rapid developments to ten companies list in the world. the solar photovoltaic industry. In this study, the positioning The top five countries with the highest demand for of the Taiwanese firms in the value chain of the global solar global photovoltaic devices were Italy, Germany, the United photovoltaic industry is analyzed. And the opportunities States,China,andJapanin2011[1, 2]. Because European and advantages of Taiwanese solar photovoltaic firms are governments have reduced their subsidies, the demand of discussed. the European market for photovoltaic devices is expected to Basedonthecompetitiveadvantageoftheelectronics decline from the 80% for 2010 to 41% by 2020 [4]. Global industry, Taiwanese firms entered to the solar photovoltaic demands for solar cells are expected to increase significantly. industry rapidly [3]. The Taiwanese solar photovoltaic indus- The emerging markets will be in Asia, Northern America, try has been developing for the 25 years and built up a and Latin America in the future. Taiwanese firms have complete industrial value chain. In 2011, the revenue of the become the leading global suppliers of the solar photovoltaic Taiwanese solar photovoltaic industry was US$5.6 billion: products for the three reasons: (1) stable product quality, (1) the revenue of the midstream sector of the silicon wafer (2) mature technologies, and (3) reasonable pricing. In this and thin-film photovoltaic cells was approximately US$3.8 study,IanalyzedthepositioningoftheTaiwanesefirmsin 2 International Journal of Photoenergy $12000 $180000 $160000 $10000 $140000 $120000 $8000 $100000 $6000 $80000 $60000 4000 $ $40000 $20000 $2000 $0 2009 2010 2011 2012(F) 2013(F) 2014(F) $0 2009 2010 2011 2012(F) 2013(F) 2014(F) Upstream Downstream Upstream Downstream Midstream Total Midstream Total Figure 2: Revenue of global solar photovoltaic industry. Upstream: Figure 1: Revenue of Taiwanese solar photovoltaic industry. silicon material; Midstream: solar cell (wafer-based); Downstream: Upstream: silicon material; Midstream: solar cell (wafer-based; thin- solar cell module and solar photovoltaic system. Source: adapted film) and solar cell module; Downstream: solar photovoltaic system. from PIDA (2012) [1]. Source: adapted from PIDA (2012) [1]. have built up their innovation capabilities in certain solar photovoltaic sectors. the value chain of the global solar photovoltaic industry and The Taiwanese solar cell industry possesses research and further investigated the opportunities and advantages of the development (R&D) abilities and exhibit significant interna- Taiwanese solar photovoltaic firms. tional competitiveness. In 2011, three of the top ten solar cell companies in the world were Taiwanese companies, that is, 2. Analysis of Global Solar Photovoltaic Motech Industries Incorporation, Gintech Energy Company, Industry and Neo Solar Power Company. The production capacity of the firm Motech, Gintech, and Neo Solar Power was 4%, 3%, 2.1. Scope of Solar Photovoltaic Industry. The solar industries and 3%, respectively [6]. are categorized as three types according to their products: (1) the solar photovoltaic industry, (2) the solar thermal energy (1) Upstream Sector. In 2011, the production capacity of the industry, and (3) the solar source industry. In this study, we upstream silicon wafer companies in China and Taiwan was focusedonlyonthesolarphotovoltaicindustry.Companies 58%and9%oftheglobaltotal,respectively[1]. The largest that comprise the value chain of the solar photovoltaic polysilicon companies in the world are Golden Concord industry are categorized as (1) upstream: silicon materials and Holdings Limited and LDK Solar Company in China, fol- silicon wafer, (2) midstream: solar cells and solar photovoltaic lowedbyWackerChemieAGinGermanyandHemlock modules, and (3) downstream: solar photovoltaic systems [5]. Semiconductor Group in the United States. Regarding the top ten silicon wafer companies in the world, five companies are located in China and two companies are in Taiwan, that 2.2. Value Chain Analysis of Global Solar Photovoltaic Indus- is, Green Energy Technology and Sino American Silicon try. Regarding the global solar photovoltaic industry (see Products Incorporation. Figures 2 and 3), the upstream industry achieves the highest profit because the market is oligopolistic [1, 11, 12]. The (2) Midstream Sector. The global capacity of the module midstream industry achieves the lowest profits. And the productionforthetoptensolarcellcompaniesisapproxi- downstream industry, including device installation and war- mately 50% [17]. The technology of first-generation devices ranty maintenance, achieves the second highest profits [13]. has diffused to the rising industrial powers of Taiwan and The revenue of the solar photovoltaic industry is globally China, though the early solar cell producers were found in predicted to reach US$150 billion in 2014 [1]. Europe,theUnitedStates,andJapan[18]. In 2011, the capacity Thetopfivesolarcellsupplycountriesintheworld,in of the solar cells production from Chinese and Taiwanese sequential order, are as follows: China, Taiwan, the United firmswas61%and15%oftheglobaltotal,respectively[1]. States, Japan, and Germany (see Table 1)[6]. The mature The Taiwanese technologies of cell conversion efficiency are technologies of the USA and Japanese companies can serve superiortothoseemployedbyChinesefirms,but17%export as the most important technology sources in both the first taxrebatefacilitatescompetitivepricesinChina[19]. and new generation solar photovoltaic industries of Taiwan Top ten suppliers of the solar photovoltaic module are and China [14]. Currently, the technology latecomers Taiwan (i) North America: First Solar Incorporation in the United International Journal of Photoenergy 3 Table 1: Top 10 global solar photovoltaic suppliers. 2009 2010 2011 1 First Solar (USA) Suntech (China) First Solar (USA) 2 Suntech (China) JA solar (China) JA solar (China) 3 Sharp (Japan) First Solar (USA) Suntech (China) 4 Q-Cells (Germany) Trina (China) Yingli (China) 5 Yingli (China) Q-Cells (Germany) Trina Solar (China) 6 JA solar (China) Yingli (China) Motech (Taiwan) 7 Kyocera (Japan) Motech (Taiwan) Gintech (Taiwan) 8 Trina (Chian) Sharp (Japan) NSP (Taiwan) 9 SunPower (USA) Gintech (Taiwan) CSI (China) 10 Gintech (Taiwan) Kyocera (Japan) SunPower (USA) Source: Solarbuzz (2012) [6]. in Germany and Solar Frontier Company in Japan. Triple Silicon material/wafer amorphous silicon cells are led by Sharp Corporation in Japan and Astronergy Company in China. Hemlock, Wacker, Tokuyama, SGS, ScanWafer, Pillar (3) Downstream Sector.Thedownstreamsectorisamarketof GCL, LDK, Rene Solar, Yingli Solar, Elma Phytol perfectcompetitionbecauseofthematurityofmanufacturing technologies and low barriers to entry. Japanese Sharp Cor- Upstream Jinzhou Rixin, Green Energy, Sino-American, Elkem poration, Sanyo Electronic Company, and Mitsubishi