Although revenue declines of more than 65% are predicted this year for the photovoltaic (PV) manufacturing equipment sector, according to IMS Research's latest quarterly report, the analysts contend that there is a 20 GW, $25 billion opportunity over the next four years as manufacturers replace aging equipment, either via upgrades or complete replacements.
Because of overcapacity in 2011, manufacturers of solar ingots, wafers, cells and modules are putting less emphasis on ramping production capacities, IMS said. The majority of equipment revenues this year will come from the need to replace existing tools.
"IMS Research has estimated that there is between 2.5 and 4 GW of existing manufacturing capacity that requires upgrade in 2012, and this figure will steadily ramp up over the coming few years," said Tim Dawson, senior research director at IMS. "Companies wishing to remain competitive and take the opportunity to gain market share will be forced to invest in new equipment."
Market shake-out will spur further equipment demand, Dawson added. "Manufacturing equipment companies that stand to benefit most are those that have a clear equipment upgrade strategy available to their customers," he said. "Furthermore, companies that will resist the shake-out best will be those who can go through these equipment upgrades with the least disruption, readying themselves for the time when end demand does ultimately pick up."