Solar Wafer Supply Shortage Confirmed For 2016, Says IHS

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Global information company IHS has confirmed fears of a solar wafer supply shortage in 2016.

The global solar industry has been awaiting confirmation of fears that there would be a shortage in solar wafers for several months now, and new evidence discovered by IHS this early in the year have only confirmed what many already believed to be true. IHS offered a warning in October, warning that as a result of rapid solar installation growth in 2015, a potential solar wafer supply shortage may follow.

Specifically, IHS warns that vertically integrated Tier 1 module suppliers — those Tier 1 companies who also have their own downstream businesses — are facing “an increasing gap between their wafer capacity and cell/module capacity,” meaning they must now rely heavily on outsourcing from Tier 2 wafer producers.

The top three independent wafer producers — those companies without downstream businesses to attend to — are GCL-Poly, Xi’an Longi silicon, and Green Energy Technology, and only comprise one third of total wafer market share over the last two years (which includes the aforementioned vertically integrated Tier 1 companies). Nevertheless, some of these Tier 1 manufacturers are outsourcing part of their manufacturing to Tier 2 partners in China. Specifically, many of the vertically integrated Tier 1 manufacturers have avoided increasing in-house wafer capacities, relying instead on long-term outsourcing with minimum fixed volumes and prices adjusted on a monthly basis. But contract pricing and spot pricing of multicrystalline wafers has been increasing since the fourth quarter of 2015.

“With current wafer capacity and market growth demand in a near future, wafer supply will continue to be tight in 2016,” IHS explained in their Market Insight press brief. “IHS estimates an 83% utilization rate for all suppliers and 88% for Tier 1 suppliers, which is the highest utilization level registered since 2010. With capacity expanding year over year, tier 1 wafer suppliers are forecasted to reach a high average utilization rate of 85% in the following three years.”

Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Latest CleanTechnica.TV Video

CleanTechnica uses affiliate links. See our policy here.

Joshua S Hill

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (, and can be found writing articles for a variety of other sites. Check me out at for more.

Joshua S Hill has 4403 posts and counting. See all posts by Joshua S Hill