Since 2023, "involution" has become a frequently discussed word in China's photovoltaic industry. Especially in the second half of 2023, competition in production capacity and price in the photovoltaic market has intensified. The overall price of the industry chain has fallen off a cliff. The photovoltaic market value will continue to fall after entering 2023. The photovoltaic market has ushered in a "cold air", forming a phenomenon of "expanding production while suspending production" and "laying off employees with one hand and poaching with the other hand". However, the photovoltaic market may not have entered a true "winter period" yet.
In the current fierce competition for photovoltaic production capacity and a sharp decline in industrial chain prices, photovoltaic cross-border companies are the first to "ebb" and leave. At present, many cross-border photovoltaic companies have announced to reduce investment in photovoltaic projects or terminate photovoltaic projects.
Compared with cross-border companies, established photovoltaic companies have certain brand and cost advantages. However, as the competition in the photovoltaic market becomes more and more fierce, news of factory closures, layoffs, and production suspensions come from time to time. Photovoltaic "ghost stories" such as factories reducing production and employees taking longer breaks than working hours are common. According to information on the Internet, the cell market has already reduced production or shut down. The production capacity is around 100GW, but compared to the overall production capacity, it is still a drop in the bucket.
With the support of policies, my country's photovoltaic industry has developed rapidly in recent years. In addition to the accelerated expansion of leading companies, a large number of cross-border companies have flocked to the market. The rapid expansion has brought a large demand for talents, and many companies have made special recruitments. However, in the second half of 2023, the competitive pressure in the photovoltaic market has become obvious. Many companies are facing pressure to survive. The launch of new projects has been forced to postpone, some production lines have been shut down, and they can only choose to streamline personnel. Especially for some photovoltaic newcomers and second- and third-tier companies, as the prices in the photovoltaic industry chain are declining day by day, even falling below the cost, when some major photovoltaic manufacturers choose to optimize their personnel structure and reduce labor costs, the second- and third-tier companies' support capabilities are even more limited. .
When the market price < average cost, the company will lose money, but it will not stop production at this time; only when the market price < cash cost, that is, the company has lost all three expenses and depreciation and begins to lose cash, will the company choose to exit the market. When companies continue to exit and supply gradually falls below demand, market prices rise, and surviving companies can obtain excess returns. Also under the storm of major reshuffle in the photovoltaic market, the advantages of leading integrated companies are more obvious. At the same time, some backward production capacity and homogeneous production capacity are bound to be eliminated.
