After several quarters of inventory depletion, the NAND market is gradually heating up, and there are concerns of a tighten supply in 2024. During an Investor Meeting held on the 7th, Phison Electronics Corporation, a supplier of NAND flash memory controllers and modules, announced that due to capacity limitations in NAND flash production, NAND supply has become constrained. When entering 4Q23, the company is already facing tighten supply for some of its products. Consequently, Phison plans to prepay its NAND flash suppliers to ensure a stable supply, as reported by CTEE.

Phison noted that its suppliers have been reducing production since the 4Q22, and it has accelerated since the 2Q23. Following three to four quarters of inventory depletion, the NAND market is gradually recovering, leading to a stabilization in NAND prices.

In fact, the strategy of module manufacturers is influenced by NAND flash suppliers. For instance, Samsung has been actively raising NAND prices. After the company initially raised NAND prices by 10% to 20% this quarter, it has decided to continue increasing prices by quarter in 2024. This strategic decision reflects Samsung’s determination to stabilize NAND prices with the aim of reversing the market’s direction in the first half of the upcoming year.

Notably, NAND chips and DRAM account for roughly half of Samsung’s memory chip sales. Simultaneously, while raising prices, Samsung continues to decrease production to control market supply, which, in turn, improves market stability and profitability.

TrendForce previously indicated that with NAND wafer prices leading the increase since August and suppliers adopting a firmer stance in negotiations, Q4 enterprise SSD contract prices are projected to rise by approximately 5~10%. On the client SSD front, as suppliers gain more bargaining power, both high-end and low-end products are expected to increase concurrently, with 4Q23 PC client SSD contract prices projected to rise by 8~13%.

TrendForce’s NAND Flash price analysis released today also highlighted that due to continuous shortages in recent wafer supply, the market has been experiencing rising prices under a shrinking volume. While spot quotations for NAND Flash packaged dies have been oscillating narrowly in quotations on account of the persistently constrained level of visibility in demand.
(Image: Samsung)

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In TrendForce’s latest solar energy pricing, it is revealed that upstream polysilicon and wafer transactions have reached a standstill, while downstream cell and module prices continue to decline.

• Polysilicon

Polysilicon prices continue to decline throughout the week. The mainstream concluded price for mono recharge polysilicon is RMB 70/KG, while mono dense polysilicon is priced at RMB 68/KG and N-type polysilicon is currently priced at RMB 75/KG.

In terms of trading, this week has shown a slight improvement compared to the stagnation of the previous week. Some small orders have been placed, but the majority of companies are still in the negotiation process. Additionally, there are ongoing discussions about transaction prices for polysilicon and crystal pulling.

Examining the price trends, there’s a notable divergence between leading manufacturers and second-tier manufacturers, with the current prices approaching the cost threshold for the latter and older capacity.

When we analyze the supply and demand dynamics, it becomes evident that as polysilicon prices continue to decline, downstream manufacturers are considering production cuts, and new production capacity might face the challenge of running at a loss right after starting operations.

Moreover, considering the projected oversupply in the future and the potential for prices to hit rock bottom, some manufacturers have realized that the profits from new production capacity may differ significantly from their expectations, prompting them to adjust their production schedules.

However, in the short term, polysilicon output is showing a month-on-month growth trend this quarter. As downstream demand decreases, polysilicon prices will likely continue to face pressure. Overall, this week has seen a decline in quoted polysilicon prices, and the price gap between N-type and P-type polysilicon continues to narrow.

• Wafer

The prices of wafer have still reduced throughout the week. The mainstream concluded price for M10 wafer is RMB 2.30/Pc, while G12 wafer is priced at RMB 3.30/Pc. The current cell prices are causing significant losses in the cell business, leading to a substantial reduction in activation rates.

The overall market turnover is currently sluggish. Additionally, the quoted prices only reflect the trend of declining wafer prices and may not accurately represent the actual transaction prices for spot goods.

On the supply side, wafer prices have continued to decline over the past two weeks. If the prices of different types of wafers keep dropping, manufacturers may find themselves in a situation where their costs exceed their selling prices.

Consequently, wafer production schedules have seen a significant reduction, forcing some second and third-tier manufacturers to maintain OEM business for meager profits. The current wafer inventory level has decreased to 1.9-2.1 billion pieces, and there are indications that prices are reaching a bottom in the market.

On the demand side, downstream cell manufacturers are gradually reducing their production schedules, and inventory issues have not been effectively resolved. As a result, cell manufacturers are becoming more cautious when it comes to purchasing wafers. This week, wafer prices have continued to decline, but the rate of decline will narrow with cost support.

However, considering the price pressure imposed by downstream consumers, their high inventory levels, and other factors, wafer prices have yet to stabilize and are likely to continue falling in the future.

• Cell

Cell prices have still declined this week. The mainstream concluded price for M10 cell is RMB 0.48/W, while G12 cell is priced at RMB 0.52/W. The price of M10 mono TOPCon cell is RMB 0.49/W.

On the supply side, current cell inventory has remained high for more than seven days. Consequently, facing pressure from both the elevated inventory levels and downstream module manufacturers, cell prices have experienced a decline.

The current price of M10 P-type cells stands at 0.48 yuan per watt, which is approaching the production cost of leading integrated manufacturers. The reduction in cell production is the current scenario.

However, the shipment pressures haven’t been alleviated, and the price gap between N-type and P-type cells has narrowed, putting both types at risk of operating at a loss due to costs exceeding their prices. On the demand side, the domestic peak season for centralized cell procurement has concluded, and there has been no significant uptick in demand in overseas markets or the distributed PV sector.

As a result, the demand for cells has weakened. With module prices also under pressure, module manufacturers are inclined to push down cell prices. Although there has been some improvement in the rate of decline for cells this week, the accumulation of cell inventory, falling upstream material prices, and sluggish downstream demand continue to exert constant pressure on cell prices.

• Module

Module prices have gone down slightly throughout the week. The mainstream concluded price for 182mm facial mono PERC module is RMB 1.08/W, 210mm facial mono PERC module is priced at RMB 1.11/W, 182mm bifacial glass PERC module at RMB 1.09/W, and 210mm bifacial glass PERC module at RMB 1.12/W.

On the supply side, module prices are persistently decreasing and have come close to the cost price of integrated manufacturers. Specialized module manufacturers, in response to module prices falling below their cost, have had to reduce their production rates to avoid losses. This is evident from the reduced demand for various auxiliary materials associated with module production.

On the demand side, the primary driver of demand continues to be large domestic projects, whereas overseas demand has not shown any significant increase. The overseas market is still working through its high inventory. In domestic bidding projects, there’s a noticeable shift toward an increased proportion of N-type modules, indicating a faster transition in demand toward N-type technologies.

In the third round of centralized procurement for PV modules by Huadian Group, the quoted price stands at 0.9933 yuan per watt. In the same month, the bidding price for modules in the centralized procurement tender by CHN Energy is 0.945 yuan per watt, marking a record low within a single month.

This price trend underscores the inevitable intense competition within the module sector, as excess production capacity is evident throughout the entire industry chain. This week, module prices have continued their descent. In summary, it’s probable that module prices will remain volatile in the future, especially considering that bidding prices for modules are swiftly approaching the 1 yuan mark.

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• PV Industry Supply Chain Price Update

During the first half of 2023, the polysilicon industry experienced expansion in production capacity, resulting in an oversupply of polysilicon and a subsequent downward trend in the entire industry chain prices. However, by the end of June, the prices of polysilicon reached a near-bottom point, and both polysilicon and wafer prices stabilized, leading to a significant increase in customer demand.

Polysilicon: In the first half of 2023, the polysilicon market witnessed fluctuating prices, starting with an initial rise followed by a subsequent decline, and an underlying issue of oversupply persisted into the second half of the year.

In early January, the expansion of polysilicon production capacity coincided with weakened demand as the year-end approached, leading to a significant decline in prices. By mid-January, the polysilicon prices fell below the cost line for polysilicon enterprises. In response, leading enterprises refrained from selling polysilicon at such low prices, causing a price rebound. As February began, the operation rate of wafer production significantly increased, leading to higher procurement demands for polysilicon and consequently a sharp rise in its prices. However, by the middle of the month, most polysilicon orders for the month had been signed, dampening the stimulus for further price increases. In March, the pressure of excess inventory prompted some polysilicon enterprises to cut prices to facilitate higher shipments, resulting in a slow reduction of prices. Moving into April, the overall supply of polysilicon remained abundant, and with strong willingness among silicon enterprises to sell, prices continued to decline gradually. May witnessed a further increase in polysilicon output, causing a faster decline in prices due to inventory accumulation and pressure from crystal pulling activities. As June approached, the market faced the release of additional production capacity and a considerable accumulation of inventory. This led to polysilicon prices nearly reaching the cost line as market demand fell short of expectations. In response, some enterprises opted for temporary shutdowns, overhauls, and delayed production to reduce inventory pressure. Moreover, increased procurement volumes from crystal pulling plants helped stabilize prices temporarily.

In July, the polysilicon inventory levels experienced a decline compared to the previous period due to increased downstream demand, leading to price stabilization. However, there remains a possibility of a slight price rebound. Projections indicate that in the third quarter, polysilicon prices might rebound to more than RMB 80/KG. The second half of 2023 is expected to witness a peak in photovoltaic demand, and the current price levels within the industry chain can help stimulate this demand. However, the third quarter will also see the concentration of new production capacity from several polysilicon manufacturers entering the market. As a result, the oversupply of polysilicon is unlikely to be significantly altered. While there may be a chance for prices to rebound, both the timing and extent of such a rebound are expected to be very limited.

Monthly price trend of Polysilicon Unit: RMB/KG

Wafer: In the first half of 2023, wafer prices experienced fluctuations with an initial rise followed by a decline. As the second half of 2023 approaches, the wafer prices still face a potential downside risk.

In mid-January, downstream pullback was observed in wafer prices due to increased cost pressures and inventory consumption among polysilicon enterprises. However, early February witnessed a surge in downstream procurement demand, resulting in a slight shortage of polysilicon supply and subsequently leading to sharp price increases for wafers. By later February, the wafer market saw stability as the supply tightened due to the influence of crucible quality, leading to a decline in cell procurement speed. In early March, the supply of high-purity quartz sand remained tight, restricting overall wafer output. The rising wafer costs and limited supply provided support for a slight price increase. As April arrived, the arrival of imported sand eased the tight supply of quartz sand, leading to an increase in wafer production. However, subdued downstream demand resulted in a slight price decline. In May, to avoid losses caused by falling prices, cell companies showed reduced willingness to procure wafers, leading to an accumulation of wafer inventory. The rapid decline in polysilicon prices further contributed to a sharp drop in wafer prices. In early June, wafer enterprises responded by reducing production and cutting prices to address inventory concerns. However, the oversupply situation persisted, and with upstream silicon prices experiencing a significant decline, wafer prices followed suit and declined sharply. Towards the end of June, wafer inventory gradually rebounded to a more reasonable level, and the decline range of polysilicon prices narrowed down. As a result, cell enterprises displayed increased willingness to purchase, leading to wafer prices ceasing further declines first.

In July, there is an expected increase in the output of cell modules, and upstream polysilicon prices have stabilized. However, during this period, there are rumors of India potentially banning the export of quartz sand. Although manufacturers have confirmed that it is merely a rumor, it has still caused some short-term nervousness in the market. Consequently, wafer prices have shown slight signs of rebounding. Nevertheless, based on the current statistics from TrendForce, the effective capacity or output of wafers in a single month remains significantly higher than that of downstream cell and modules. Even if there is an explosive demand for wafers in the second half of the year, there is still a substantial amount of new production capacity waiting to be released. As a result, the market continues to face an oversupply situation, and there remains a considerable risk of declining wafer prices later on.

Monthly price trend of wafer Unit: RMB/Pcs

Cell: In the first half of 2023, cell prices experienced sharp fluctuations, with N-type cells maintaining a premium advantage.

In mid to late January, there was a significant increase in polysilicon and wafer prices, prompting cell prices to rise accordingly. Early February saw a surge in module production scheduling, driving up the demand for cells and supporting their rising costs, leading to further price increases. However, by mid and late February, the interplay between module inventory and pricing resulted in slight declines in cell prices. In March, cost pressures prompted cell enterprises to consider raising prices. However, the high inventory levels and resistance from downstream module companies, unable to sell at higher prices, led to price stability. Towards the end of the month, increased demand for G12 cells caused prices to rise slightly. Moving into April, the overall supply and demand for cells achieved a better balance, resulting in generally stable prices. G12 cells, due to tight supply and demand, commanded significantly higher prices compared to M10 cells. However, May saw a sharp decline in upstream polysilicon and wafer prices. Additionally, downstream module companies exerted pressure to reduce prices, leading to a rapid decline in cell prices. In June, as upstream raw material prices were approaching their bottom, cell prices continued their downward trend. Towards the end of the month, the stabilization of polysilicon and wafer prices, coupled with increased downstream purchasing demand, resulted in a narrower range of cell price declines.

Upstream polysilicon and wafer prices have stabilized, providing a favorable environment for the market. Furthermore, the surge in customer demand has led to a significant month-on-month increase in module production scheduling for July, which is expected to provide strong support for cell prices. If downstream demand surpasses expectations or experiences an early explosion, there is a potential opportunity for cell prices to rebound in the future market. Throughout the first half of 2023, the production capacity of N-type cells fell short of expectations, but the robust customer demand created a structural shortage of N-type products in the market. This resulted in a price gap between N-type and P-type cells. However, in the third quarter, manufacturers are gradually increasing N-type production capacity, which should alleviate the intense supply constraints of N-type products. Yet, this might further stimulate explosive demand for N-type products among customers.

Monthly price trend of cells Unit: RMB/W

Module: In the first half of 2023, overall module prices experienced fluctuations and showed a downward trend. However, expectations for the second half of 2023 are optimistic, as customer demand is anticipated to explode.

In early January, as customer projects reached their end stages, there was a gradual decrease in procurement demand. The sharp decline in upstream raw material prices impacted the modules sector, leading to price fluctuations. In February, with customer projects not yet scaling up and market demand increment falling short of expectations, module prices remained relatively stable. Come early March, customer purchasing was not active, and stable cell prices contributed to the overall stability of module prices. Towards the middle and end of the month, there was an uptick in overseas demand, but cost pressures persisted, keeping module prices stable. Throughout April, module prices continued to remain stable as costs remained unchanged. However, early May saw temporary falls in upstream polysilicon, wafer, and cell prices, which did not immediately affect module prices, allowing them to maintain stability. Nonetheless, by mid-May, the impact of the declining industry chain prices started affecting modules, leading to lower-than-expected customer demand and a significant decline in module prices. In June, although polysilicon and wafer prices gradually stopped falling, customer demand had not yet surged on a large scale, leading to a continued downward trend in module prices. In some instances, module prices even dropped below RMB 1.2/W.

Currently, module prices are experiencing irregular fluctuations, but overall, they have reached the lowest level in recent years. As upstream prices have started stabilizing, it is expected that module prices will soon follow suit, stabilizing at around RMB 1.3-1.4/W. This price point can act as a stimulus for a quick pickup in market demand. In the domestic market, positive signals of increasing demand are evident. Large-size base projects have already commenced construction, and the country has issued the second batch of project lists, with preparations underway. Additionally, plans for the third batch of projects are in progress, and the centralized market is expected to witness an explosion in demand. For the main overseas market, Europe’s inventory has reduced after a period of consumption, but the grid consumption issue has posed a challenge for demand revitalization. However, with the arrival of summer, Europe is expected to face peak electricity consumption, presenting a new opportunity for demand pickup in the region.

Regarding the U.S. market, being a high-value overseas market, it plays a crucial role for various leading module companies in their sales strategies. However, policy fluctuations in the U.S. market have always been a concern for both the supply and demand sides. The Middle East market has been notably active this year, with recent signings of large-scale sales frameworks and cooperation announcements on the manufacturing side. As a result, this market holds considerable potential for future growth and is worth close attention.
Monthly price trend of module Unit: RMB/W

In the first half of 2023, there was a continuous release of polysilicon production capacity, leading to intensified dynamics between the upstream and downstream industry chains, resulting in price fluctuations. Looking ahead to the second half of 2023, the situation of excess supply of polysilicon is anticipated to persist, making it challenging to bring about significant changes. Consequently, any potential price rebound is expected to be limited in both timing and extent. The wafer market remains oversupplied, presenting a downside risk to prices. On the other hand, the cell market is experiencing gradual release of N-type cell production capacity, with expectations of an explosive demand for N-type products. As for modules, both domestic and overseas demands for installed capacity are projected to improve, indicating a positive turn in the market outlook for the latter half of 2023.