Analysts see a gathering of clouds on the horizon

Jul 30, 2008 | 01:25 PM |

Shortages of polysilicon have plagued the solar market since 2005 but that's about to change, given that more than 130 projects are in the planning or construction stages. Most analysts feel that with so many projects in the pipeline, shortages will ease this year and next and the market will swing to oversupply in 2010 or so.

Ingo Queiser, a solar analyst with European investment bank Landsbanki Kepler, has a different view. There's no question that more polysilicon supply will soon hit the market, Queiser said, but he's doubtful that many of the projects will make it online without significant delays and start-up glitches, given that so many are being built by companies not experienced in silicon technologies.

"Historically, we had five or six established silicon producers," Queiser said in a telephone interview from Frankfurt, Germany. "Meanwhile, fat margins have attracted new entrants that probably number 100, and the count goes up as you add the non-credible projects. I do not believe in the capacity announcements these guys are giving out because they want to ramp production up within two or three years, and that would be as fast as the established players."....