Domestic photovoltaic companies' factories in Southeast Asia are experiencing a new round of turmoil, with leading companies including LONGi Green Energy and Trina Solar being reported to be closing some of their factories in Southeast Asia. On June 4th, it was reported that LONGi Green Energy's photovoltaic module factory in Malaysia will gradually shut down from this week, and the company's five production lines at its Vietnamese cell factory have also been completely suspended. In addition, there are rumors that LONGi Green Energy's Xi Xian branch has issued a notice offering three options for laid-off employees to choose from - resignation and compensation of N+1; or a monthly payment of 2150 yuan * 75%, waiting for notice to work again when needed; or continue to work and take turns on leave.
In response to the rumors, LONGi Green Energy provided a situational explanation to the reporter of Securities Times · e-Company. It stated that after verification, the current industry environment is complex, and the company continues to gain insights and judgments on key factors such as the global photovoltaic market and policies.
LONGi Green Energy also mentioned that in order to widely promote the agile intelligent manufacturing model, the company continues to promote the digital upgrade and technical transformation of global base factories. As a result, there are adjustments to the production plans of different regional bases. During this period, the company has taken various measures such as cross-base support and shift rotation to minimize the impact of production plan adjustments on employees and protect their legal rights according to the law. The company will adjust production plans in a timely manner according to market changes and upgrade and transformation progress. While responding to the rumors, LONGi Green Energy also stated that this year, the industry faces multiple impacts such as product price changes, accelerated technological iteration, and trade policy adjustments, and photovoltaic companies face certain business challenges. "The company will continue to carry out product technology innovation and intelligent manufacturing upgrades, and firmly look forward to the long-term positive trend of the global photovoltaic industry." Coincidentally, on June 5th, another industry leader, Trina Solar's factory in Thailand, was also reported to have entered a production suspension phase. The message said that its module production line had been suspended at the end of May, and the battery production line is planned to be suspended around June 13th.
In response to this, Trina Solar responded to the reporter of Securities Times · e-Company. Trina said that the company's production capacity in Thailand and Vietnam is about to enter a production suspension and maintenance state, and similar maintenance will take place every year in mid-year. In addition, the company's production capacity in Thailand and Vietnam is mainly aimed at the United States. Trina Solar has always maintained a competitive advantage in the US market, but due to some policy environment impacts, there will be short-term fluctuations in the US market demand. The company will make dynamic and optimal adjustments to the production plan based on the industry and market situation; Trina Solar believes that short-term policy fluctuations in the US market are not the first time, but in the long run, the leading position of leading companies represented by Trina in the market has not changed.
As for how to deal with the pressure of the closure of factories in Southeast Asia, Trina Solar also responded. The company said that it has laid out the production capacity of components in the United States and the production capacity of cells and components in Indonesia in a forward-looking manner, and both are under construction. Among them, the Indonesian factory is expected to be put into production in the third quarter of 2024, and the joint venture partner of the project is the Indonesian State Electricity Company. "In the long run, Trina will improve the competitiveness in overseas markets and respond to international trade risks with a broader and deeper layout of globalization and localization of operations."
It is understood that the important background for the closure of photovoltaic factories in Southeast Asia is the expiration of the exemption from anti-circumvention investigations by the United States. On May 16th, the White House official website announced that while tightening the exemption of import photovoltaic tariffs, it emphasized the subsidy policy for the US domestic solar manufacturing industry. On the same day, the US Department of Commerce announced an anti-dumping and counter-subsidy investigation on photovoltaic cells (whether or not assembled into modules) imported from Cambodia, Malaysia, Thailand, and Vietnam. According to the White House document, the tax-free policy for some photovoltaic products imported from Cambodia, Malaysia, Thailand, and Vietnam since June 2022 will end after it expires on June 6th this year. This latest situation means that the difficulty for Chinese photovoltaic companies to "bypass" Southeast Asia to export to the United States has increased. Lv Jinbiao, deputy director of the Silicon Industry Expert Group of the China Nonferrous Metals Industry Association, told reporters that domestic companies set up factories in the above four Southeast Asian countries mainly to meet the demand of the US market. Under the current situation, the products of the four countries can no longer be exported to the US market. However, Lv Jinbiao also mentioned that due to the insufficient manufacturing capacity of photovoltaic in the United States, once there is a shortage of components and a sharp increase in prices in the future, it is still possible to open the mouth for photovoltaic components produced in Southeast Asia.
The closure of factories in Southeast Asia also tests the globalization layout of Chinese photovoltaic companies, especially when major economies such as the United States, Europe, and India are expanding their domestic photovoltaic manufacturing capabilities, Chinese photovoltaic companies are facing challenges when going overseas. To this end, many Chinese photovoltaic companies have set their sights on the Middle East market. Since last year, companies including GCL Technology, TCL Zhonghuan, and Trina Solar have announced investment plans in the Middle East, with planned production capacity involving polysilicon, silicon wafers, cell components, and auxiliary materials. In addition to new project investments, mergers and acquisitions are also an optional path. TCL Zhonghuan recently announced that it plans to control Maxeon through a package of reorganization transactions such as convertible bonds and private placements, with a maximum total investment of $197.5 million, ultimately achieving the company's controlling merger and acquisition of Maxeon. Maxeon is mainly responsible for the design, manufacturing, and sales of Maxeon and SunPower brand solar components, and its business involves Africa, Asia, Oceania, Europe, and America, covering the global photovoltaic rooftop and power station market. A person from TCL Zhonghuan told reporters that the purpose of this is still to achieve international development.
Trina Solar said in a recent institutional research that the company has been actively promoting the layout of globalization, on the one hand, to enhance the competitiveness in overseas markets, and on the other hand, to strengthen the risk resistance in overseas operations. The company currently has 5GW of components under construction in the United States and 1GW of cells & components under construction in Indonesia, both of which are expected to be put into production by the end of 2024. In addition, the company also has reserved capacity projects in the United Arab Emirates.
Jinko Energy said that in recent years, international trade protection policies have been frequent, and the company is actively paying attention to the new policy changes in the United States and will actively respond according to the relevant progress. The company's 2GW component capacity planned in the United States has been successively constructed and put into production in the first half of this year, and the relevant subsidies are currently in the application process. Jinko Energy also mentioned that the Middle East market has a good photovoltaic lighting condition and its own energy transformation needs, and the photovoltaic installation has a large long-term sustainable growth potential, and the company is confident in maintaining its competitive advantage in the local area.
