Taiwanese solar merger to create 5th largest cell maker globally

A merger between Gintech Energy (TPE:3514), Solartech Energy (TPE:3561) and Neo Solar Power (TPE:3576) will create the fifth largest photovoltaic (PV) cell maker globally by capacity, EnergyTrend said Monday.

The Taiwanese firms yesterday announced that they have signed a non-binding letter of intent (LoI) that outlines a plan to merge and form United Renewable Energy Co Ltd (UREC).

EnergyTrend, a unit of Taiwanese market intelligence provider TrendForce, said the three companies currently have 3.5 GW of combined solar cell manufacturing capacity at home, and an additional 1.56 GW at plants in China, Thailand and Vietnam. They also currently have the capacity to produce roughly 600 MW of PV modules per year. The plan is to boost that to 3 GW after the merger.

A combination between the three will reduce redundancy in operational and research and development costs. NSP, Gintech and Utech will be able to combine their resources to get hold of higher-end manufacturing equipment and R&D.

“While the Taiwanese solar industry is still slightly more advanced than the Chinese, it is starving for capital needed to maintain the technological edge,” EnergyTrend says.

Also, being one of the top five cell makers globally will give UREC a significant advantage when negotiating material and equipment deals with upstream PV firms.

Another advantage of such a combination will be that the three firms will able to complement each other, analyst Rhea Tsao says, as their products and target markets differ. Neo Solar, or NSP, is betting on high-efficiency solar products and is upgrading to mono-Si PERC and heterojunction (HJT) production. Gintech has certain experience with wafer and module making, through its units Utech Solar and Gintung. Solartech, meanwhile, is focusing on the multi-Si PERC technology.

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