TrendForce: Motech Merges with TSi to Become Top 1 Professional Solar Cell Maker

Taiwanese solar cell manufacturer, Motech, announced on December 26, 2014 that it will merge with Topcell Solar International Co. (TSi), and Motech will be the surviving company and remain the same company name post the merger. 

“After Motech’s merger, its solar cell production capacity will hit 3GW, which is the largest professional solar cell maker that focus on manufacturing solar cells. Globally, it trails slightly behind the vertical integrated Hanwha SolarOne and Yingli, with 3.28GW and 3.2GW solar cell production capacity respectively,” said Jason Huang, Research Manager of EnergyTrend, a research division of TrendForce. Following the industry development trend of larger enterprises remaining strong, production capacity expansion is also beneficial to price negotiations other than steadily leading in technology and quality, making it one of the essential factors of maintaining supply chain competitiveness. 

Huang indicates that currently, Motech’s production capacity in Taiwan and China are 1.1GW and 700MW respectively. As for TSi, its production capacity in Taiwan is about 1.2GW. Between the two, their total mono-si cell production capacity is about 450MW, and the capacity of high efficiency PERC cells is approximately 140MW. Thus, multi-si cells will take up the majority of the capacity. EnergyTrend projects that Motetch will gradually allocate more production capacity to mono-si cells. 

Motech and TSi’s production capacity scale are currently both above 1GW, and the combined company may help in lowering their costs in terms of raw material bargaining power and economy of scale after the merger. On the other hand, after the U.S. announced the final ruling for anti-dumping and countervailing duties, Motech was charged with the lowest tariff rates among the Taiwan solar cell makers. As the global solar cell production capacities remain limited, it will have greater opportunities to win more orders. Therefore, Motech can quickly obtain TSi’s production capacity, and win over a greater market share after the merger. 

Analyzing the past merger cases of Taiwan maker, NSP’s merger & acquisition of DelSolar and SAS’s merger & acquisition of Sunrise, were all mainly leaning to vertical integration. For other cases, such as E-TON Solar merging into Inventec and this time’s M&A between Motech and TSi, are more geared towards expanding within a single part of the supply chain. Inventec’s acquisition of E-TON Solar at the time was also mainly targeted towards E-TON’s mono-si production capacity, which can mutually strengthen the two. 

“Motech’s M&A this time can be considered as an expansion of production capacity, but at the moment, there is no clear indicator of any mutually strengthening aspects,” said Huang. TSi plans its overall equipment in a higher standard within the industry, and it has been researching on high efficiency technology includes N-type mono-si cell. “Therefore, the M&A’s purpose might not just mutually strengthen the two companies within the fiercely competitive and rapidly changing solar industry, but to minimize the differences and shorten the transition and adjustment period,” added Huang.