2022 is regarded as the first year of N-type technology industrialization. In the window period of technology iteration, traditional photovoltaic manufacturers have drastically expanded N-type production capacity to consolidate their market position. According to InfoLink forecasts, the market share of N-type TOPCon battery technology will reach 65% in 2024, becoming the mainstream of the market. The market share of P-type battery technology will drop to 23%. HJT and BC battery technology together account for about 10% of the market.

At the time of the N-type technology explosion, old capacity was eliminated through impairment. Junda shares (002865.SZ) in 2023 to charge up to 0.9 billion yuan of fixed asset impairment, or about 0.095 billion yuan per GW, a huge amount of asset impairment to rely on PERC capacity of enterprises such as sword hanging.

In addition to the impairment of old production capacity, some head manufacturers have initiated technical upgrading, PERC capacity to transform into TOPCon demand is rapidly brewing. TOPCon has become the main technology path for technological upgrading due to its high compatibility with PERC and low investment cost. From the perspective of the industrial chain, the battery chip as the core technology link has become the top priority of technological upgrading. However, not all PERC production lines are suitable for upgrading, the relevant transformation also involves technology, cost, investment recovery period and other factors. For battery chip manufacturers, whether the final production line is upgraded depends on whether the investment is worth it.

Industry insiders said that in this wave of industry reshuffle, who can take the lead in laying out the new technology route and quickly reduce costs and increase efficiency to make it an advantageous production capacity, in order to maintain an advantageous position in the fierce competition.

P-type capacity elimination intensifies

, old capacity

Impairment pressure increases steeply

according to InfoLink disclosure, in the second half of last year, with the expansion of TOPCon production gradually falling to the ground and climbing, the demand for PERC battery chips shrank rapidly due to serious overcapacity and iterative transformation of technology. at the end of the year, manufacturers faced serious losses, with gross profit reaching-11%, and enterprises shut down their production lines one after another to reduce losses.

in the tuyere of technology iteration, various manufacturers actively imported TOPCon production line, and the climbing of production capacity accelerated on-line in the second half of last year. According to InfoLink judgment, after evaluating the postponed expansion plan and the scale of PERC battery renovation, the PERC market share will remain in the single digits from 2025 onwards, and then gradually become a special commodity in the photovoltaic market, the proportion will continue to shrink in the next few years.

According to Liu Jimao, founder of Hongyang Solar, the development trend of the photovoltaic industry is to reduce costs and increase efficiency. The efficiency of N-type batteries is higher than that of P-type batteries, and there is much room for subsequent improvement. In 2023, N-type component shipments have become the mainstream. By 2024, N-type will occupy a major market share, and P-type components will gradually withdraw from the market.

The current photovoltaic industry is in an important period of technological upgrading. Accelerating the elimination of backward production capacity and promoting the clearing of the industry is the only way to get out of structural surplus. Insiders of Tongwei Stock (600438.SH) told titanium media APP that if it is scrap capacity, we will carry out accounting treatment according to relevant requirements, that is, we will have accounts related to fixed asset impairment scrap.

In fact, companies in the industry have disclosed specific impairment amounts for P-type capacity. Junda's provision for impairment of fixed assets related to the 2023 P-type PERC battery is approximately 0.9 billion yuan. It is worth noting that this also has a greater impact on the performance of the fourth quarter. In 2023, Junda achieved a net profit of $0.832 billion, compared with $1.638 billion in the first three quarters. From the financial data, the net profit loss of Junda shares in Q4 2023 is about 0.8 billion yuan.

Junda shares statistics, as of the end of 2023, the company's P-type production capacity of 9.5GW, shipments of 9.38GW, nearly full production and sales. The company told titanium media APP that the impairment was due to the fact that TOPCon is the main market at present, and the competitiveness of P-type is not as high as before. Now the PERC production line has basically been reduced, so it is mainly disposed.

based on this calculation, the impairment amount of Junda shares per GW is about 0.095 billion yuan. According to the current technological development situation, Runyang shares and Zhongrun Solar Energy, which are still preparing for IPO, may face considerable pressure on PERC capacity impairment in the future.

According to the full-year battery chip shipment ranking released by InfoLink, Tongwei shares, Aixu shares (600732.SH), Zhongrun Solar Energy, Jietai Technology and Runyang shares ranked in the top five. The total shipments of the above five battery manufacturers reached nearly 182GW in 2023, an increase of about 56% year-on-year. After the long-term layout of overseas channels and overseas expansion, Zhongrun Solar officially overtook in 2023 and rose to third place. Runyang shares dropped from third place in 2022 to fifth place.

It is worth noting that both the Zhongrun Solar and Runyang share fundraising projects are intended to lay out the N-type technology route, but according to their prospectus, the vast majority of their revenue comes from PERC capacity. Zhongrun Solar's revenue from single crystal PERC in the first half of 2023 was about 80% of its main business revenue, while Runyang's sales of PERC batteries accounted for more than 95% of total sales during the reporting period (2020-2022).

TOPCon becomes the most beneficial technology for technological transformation

In addition to impairment, the photovoltaic industry is also accelerating the pace of capacity upgrades. A few days ago, the photovoltaic equipment manufacturer Jiejia Weichuang (300724.SZ), which is regarded as a "shovel seller", said on the investor interaction platform that N-type battery is the mainstream technology in the current market, and P-type transformation is also a way to improve the production capacity of N-type battery. At present, the company has obtained corresponding orders and is in continuous negotiation.

roboco (300757.SZ) also felt the changes in the market. the company mentioned in its record of investor relations activities in January that due to the general trend of photovoltaic cell technology path changing from PERC to TOPCon, the demand for downstream customers to expand production has increased dramatically. From the information collected on the market side, downstream customers still have demand for expansion and strong demand for existing capacity upgrades.

In fact, Roboco mentioned in its 2022 annual report that with the replacement of PERC by TOPCon, the PV industry has strong demand for new investment and upgrading of existing capacity. In response to the titanium media APP, the company said that we will have the demand for upgrading all year round.

TOPCon, HJT and XBC are the current mainstream N-type technology routes. From the perspective of various technologies of N-type batteries, TOPCon battery technology is relatively mature than other technologies, and can be directly modified on the P-type battery production line, so the investment cost is relatively low.

According to Minsheng Securities' analysis of photovoltaic cell technology, one of the major advantages of TOPCon is that it is expected to extend the life cycle of PERC production lines and reduce marginal costs. TOPCon and PERC are both high-temperature processes and retain and utilize the existing traditional P-type battery equipment process to the greatest extent, mainly adding polysilicon/amorphous silicon deposition, boron diffusion and other equipment. Both battery technology and production line equipment are highly compatible, and TOPCon can be upgraded from PERC production lines without the need for new production lines. If you consider upgrading from the PERC production line, you only need to increase the investment by 0.5-0.1 billion yuan/GW, and the marginal investment cost is better than other N-type technology routes. In the face of large-scale PERC production line equipment asset depreciation pressure, the transformation to TOPCon is conducive to reducing the risk of sinking.

In summary, due to the advantages of technology and investment cost, TOPCon has become the main beneficial technology route for P-type to N-type technological transformation.

The upgrade of PERC technology to TOPCon technology is not just a simple addition of some processes, nor is it led by equipment manufacturers to deliver the entire line of work. There are certain technical barriers to the TOPCon process, which needs to be led by battery manufacturers to integrate more than a dozen complex processes and improve key process technologies, and finally achieve a balance of conversion efficiency, yield and non-silicon cost indicators, which Aixu has talked about in its research activities.

besides TOPCon, can PERC be upgraded to other technical routes? In response, Maiwei shares (300751.SZ) told titanium media APP that PERC upgrade TOPCon can be improved on the original technology by adding equipment. However, PERC cannot directly upgrade the equipment to HJT equipment and needs to re-purchase.

Liu Jimao believes that TOPCon can be upgraded from the P-type production line with a slightly lower cost and has been the mainstream of the market in the past two or three years. HJT production line equipment needs to be redeveloped with high cost but high efficiency. It may become the mainstream of the market in three years.

the head enterprises are upgrading one after another, and the focus of technological transformation is on the battery link

Driven by the development of N-type technology, some leading enterprises have completed or started relevant technological transformation and upgrading projects.

in may last year, chint xinneng took the lead in mass production of the TOPCon 5GW project for the third phase of PERC technical transformation at haining headquarters. The company said that this is the industry's first N-type upgrade replacement project.

Aixu shares said on the investor interaction platform on January 30 that the company has already carried out the plan demonstration and preliminary preparation work for PERC upgrade TOPCon +, will start the upgrade work in the near future and plans to complete the upgrade of most PERC production capacity by the end of the third quarter. It is expected to achieve a conversion efficiency of 0.2 percent higher than that of similar products in the industry, and to further iterate on the more advanced TOPCon + upgraded technology, which is expected to result in a conversion efficiency of 0.5 percent higher than that of similar products in the industry.

at the same time, tongwei shares also told titanium media APP that most of the company's p-type battery production capacity can be upgraded, and some of them are currently being upgraded. in addition, the newly-built 41GW n-type production capacity will be put into production one after another this year.

Liu Jimao told titanium media APP that the technological transformation involves four links: silicon material, silicon chip, battery chip and component, of which the most important is the battery chip link. Insiders of Tongwei shares also said that, on the whole, the focus of P to N is mainly focused on silicon and battery technology.

According to the analysis of industry insiders, in the core link of the photovoltaic industry chain, only the battery is the king of technology. Because of its high technical barriers, it is more difficult to transform.

regarding questions about the technological transformation of the silicon material link, daqo energy (688303.SH) told titanium media APP that from the silicon material end, p-type material and n-type material are essentially polysilicon, but there will be some differences in physical and chemical indexes and appearance compactness. In view of the difficulty of upgrading, the above-mentioned people said that if the original equipment supporting degree and automatic control level are relatively low, the pressure and difficulty of upgrading the production line will be greater. Like some head companies with more advanced production lines, the cost and difficulty of switching will be lower.

and the components that are closely related to the battery are not so high for technological transformation.Please. Insiders of Tianhe Solar (688599.SH) told titanium media APP that in general, the P-type and N-type components do not need to be adjusted much, mainly because they are related to the size of the battery and do not need to be changed as much as the battery link. The component is mainly to adjust the size of the adaptation, for the equipment does not increase or decrease the demand.

However, not all PERC lines can be upgraded. Wanlian Securities Investment Advisor Qu Fang believes that process compatibility is one of the factors restricting the upgrading of production lines. Specifically, TOPCon technology requires the introduction of nanoscale perovskite materials and related processes, so the compatibility of the old and new processes needs to be considered when modifying the original production line to avoid process conflicts or production instability. Secondly, equipment investment costs and production costs are also important constraints, TOPCon technology requires new equipment, including nano-scale perovskite coating equipment, these equipment investment costs are higher, may increase production costs. Therefore, if the company does not have sufficient financial support, or no effective cost control strategy, then the upgrade may become unrealistic.

Zhang Yue, chairman of Aoyou International, believes that the restrictions on specific upgrades depend on factors such as the original design of the production line, equipment conditions, and the technical strength of the company. In the process of upgrading, it may face the problem of reduced production efficiency. Enterprises need to fully consider this factor when transforming production lines. Due to the impact of upgrade costs and production efficiency, it may take a long time for enterprises to recover their investment, so the return on investment period also needs to be fully evaluated.

related companies in the industrial chain talked about more specific details. jiejia weichuang told titanium media APP that there were requirements for the factory building because the whole production line became longer after the equipment was added. The company will be based on plant, investment and other considerations for the corresponding transformation, so the difficulty of upgrading depends on the situation of each customer. At present, some customers have placed orders, some have been delivered, and some customers are still in negotiation.

Tongwei shares also said that one of the main restrictions on upgrading lies in the size of the entire workshop. at the same time, the company will also comprehensively consider the economy and cost of the renovation to see if the overall investment is worth it. Therefore, not all production lines will be upgraded, but it depends on the specific planning.

Zheng lei, chief economist of samoyed cloud technology group, believes that the transformation and upgrading of p to n technology will accelerate the survival of the fittest in the industry and promote the concentration of production capacity to high-efficiency and high-quality enterprises. Those enterprises that take the lead in technological upgrading and have the production capacity of N-type battery chips will have an advantage in the market competition and are expected to further increase their market share. For those enterprises that fail to follow up the technology upgrade in time, they may face the pressure of market elimination. (this article started on titanium media APP, by Lu wenyan)