With the rapid iteration of N-type technology, there remains a significant price spread across the industry chain, with silicon materials and batteries having the largest spread of around 13-14 yuan/KG and 0.08 yuan/W, respectively. The price of N-type silicon has been steadily increasing recently, and there are indications of a potential price hike in the battery segment in March. Against this backdrop, we analyze the supply and demand dynamics of various N-type segments.
Silicon: Short-term N-type output share reaches its limit, Crystal pulling highly flexible
Currently, there is no clear standard for N-type compared to P-type, and N-type are mainly provided by leading factories. Due to the current higher price of N-type silicon materials (13-14 yuan/KG) compared to P-type, leading companies have already reached a high level of N-type output share to enhance profitability. In the future we will track the production capacity of 200,000 tons by Tongwei and 100,000 tons by Daquan. However, as the crystal pulling segment has already increased the proportion of N-type shipments to over 60%, it is expected that the N-type silicon material market will remain in a tight balance in the short term, with the release of capacity in the second quarter gradually will loose trend.
chart：Enterprise N-silicon output
Wafers:P-N switch is relatively easy, mostly requiring process know-how
For wafer companies, the switch to P-N is more about improving process control, without equipment upgrades. Since the fourth quarter of 2023, there has been a noticeable increase in the proportion of N-type wafers, accounting for over 60% now. With the increasing demand for N-type , the market share will further increase.
Figure: N-type silicon share in February
Cell: Concentrated capacity expansion in the second half of 2023, short-term supply gap possible
Major TOPCon cell capacities have been gradually put into operation, with around 160GW/120GW added in the third and fourth quarters of 2023, respectively. By the end of 2023, the scale of TOPCon cell capacity had reached around 500GW.
Looking ahead to 2024, the large-scale wave of TOPCon cell production has ended, mainly focusing on projects that have already started construction, including 28GW at JinkoSolar's Shanxi base, 16GW at Tongwei's Pengshan, and 25GW at Shuangliu, as well as overseas projects of JinkoSolar, Tongwei, and Zhongrun. In addition, JinkoSolar Technology and Tongwei are also upgrading their PERC cell capacities. Since the fourth quarter of 2023, due to poor profitability and tight of refinancing, and the progress of construction in some cell factories has also slowed down.
chart：TOPCon suspends expansion plans
Most cell companies generally require a ramp-up period of 3-6 months. Starting from the second quarter of 2024, many TOPCon cell capacities in the industry will reach full production, with a production proportion of over 70%. Considering the reduced profitability since the fourth quarter of 2023 and the decreased enthusiasm for capacity expansion, the commissioning time may be delayed by one quarter. Currently, as most companies have not reached full production capacity, TOPCon cells are in a relatively tight situation.
Modules: Significant increase in N-type demand, expected to exceed 70% for the whole year
From the perspective of module demand, domestic projects have significantly increased the demand for N-type. From less than 10% in the first quarter of 2023 to over 50% in the fourth quarter of 2023, then reaching 67% in December 2023. Looking ahead to the whole year of 2024, we believe that the industry's demand for TOPCon modules will be over 70%.
Figure : Module calibration capacity in 2023
