In the context of the global energy transition, the photovoltaic industry has been hailed as the future star of clean energy. However, the sudden change in the photovoltaic market in 2025, especially the news of DAQO Energy's announcement of phased production cuts, has not only aroused widespread attention in the industry, but also led to the market's in-depth thinking about the photovoltaic industry. Is there a cold winter for the PV industry? Or is it facing a major reshuffle in the photovoltaic industry? Similar concerns and considerations are endless. China Exportsemi will analyze the dilemmas and opportunities of the photovoltaic industry from multiple dimensions such as market status, corporate decision-making, technological innovation and future trends.
Industry status: The imbalance between supply and demand intensifies market competition
In recent years, the global PV market has expanded rapidly, driven by strong demand growth. However, the 2024 data shows that the imbalance between supply and demand within the industry is gradually emerging.
1. Overcapacity:
According to the China Photovoltaic Industry Association, polysilicon production capacity will reach about 1.5 million tons in 2024, while the actual demand is less than 1.1 million tons, with a surplus rate of nearly 27%. This imbalance stems from the mismatch between the rapid expansion of upstream capacity and the slowdown in downstream market demand.
2. Price wars and vicious competition:
According to the data, polysilicon prices have fallen by more than 35% in 2024, and some companies have even sold at low prices in order to seize the market, resulting in serious compression of profit margins. Small and medium-sized enterprises bear the brunt, some manufacturers withdraw from the market due to the rupture of the capital chain, and the entire industry falls into "involution" competition.
3. Increase in barriers to international trade:
Europe and the United States have strengthened supervision of imported photovoltaic products and increased anti-dumping duty rates, which has intensified the export pressure on domestic manufacturers and further intensified competition in the domestic market.
DAQO Energy Production Cuts: A Strategic Choice in a Crisis
DAQO Energy, the world's leading polysilicon manufacturer, announced a phased production reduction and overhaul that sparked heated discussions in the industry. Behind this decision, it is not only a response to the current imbalance between supply and demand in the market, but also a strategic layout for enterprises to seek long-term development.
1. Specific measures to reduce production:
DAQO Energy plans to temporarily suspend some high-purity polysilicon production lines, overhaul and upgrade production equipment, and reduce capacity supply by 10%-15%.
2. Strategic Objectives:
- Alleviate market pressures: Stabilize market prices by reducing supply and avoid further exacerbation of the industry price war.
- Enhance competitiveness: During the overhaul, equipment upgrades are carried out to improve product purity and yield, and prepare technical reserves for the next stage of market recovery.
3. Industry Guiding Effect:
DAQO Energy's action is seen as an important signal of industry self-discipline, and its production reduction strategy may drive more leading companies to participate in supply and demand adjustments, and promote the gradual restoration of market balance.
Figure: The enlightenment of DAQO Energy's production cut to the photovoltaic industry
Employee placement issues: the flip side of reduced production
Although reducing production and maintenance is a rational choice for enterprises, its direct impact on employees cannot be ignored. It is reported that some employees of DAQO Energy's Inner Mongolia subsidiary were notified of compulsory vacations, only receiving the minimum wage, and the actual income after deducting social security was less than 1,500 yuan. This situation has raised concerns about corporate social responsibility.
How to properly resettle employees in the process of reducing production is an important aspect of testing the company's ability to cope with the crisis. Industry experts recommend:
- Provide skills training to help employees improve their professional capabilities;
- Reduce the impact on employees' earnings through flexible working hours policies;
- Introduce employee incentives to maintain team morale and stability.
Industry self-discipline: building a sustainable development ecosystem
In response to the market chaos, the China Photovoltaic Industry Association (CPIA) took the lead in launching the Convention on Self-Discipline and Production Control in the Photovoltaic Industry at the end of 2023, which was signed by 33 PV companies.
1. Content of the Convention:
Enterprises promise to voluntarily control production when the market is in surplus, avoid vicious competition, and stabilize prices through cooperation.
2. The role of DAQO Energy:
As one of the leading enterprises in the industry, DAQO Energy not only actively participates in the formulation of the convention, but also takes the lead in taking practical actions, and its production reduction measures are regarded as the implementation of the self-discipline convention.
The implementation of this convention may become an important opportunity to promote the industry from price war to quality competition, and lay the foundation for the long-term healthy development of the industry.
Technological innovation: the only way for the industry to break through
In the cold winter of the market, technological innovation has become the key for photovoltaic enterprises to get out of the predicament. DAQO Energy has invested heavily in the construction of a new energy research institute, focusing on core technology research and development and product upgrades.
1. R&D focus:
- High-efficiency silicon wafers: Promote the efficiency of monocrystalline silicon wafers to exceed 27%, and improve the power generation performance of photovoltaic modules;
- Cost reduction and efficiency increase: Develop low-energy production technologies to reduce unit silicon consumption and carbon emissions;
- New materials: Research and development of corrosion-resistant, high-weather-resistant packaging materials to improve product life and reliability.
2. Smart Manufacturing Transformation:
Introduce industrial Internet and AI technology to realize the full-link digital management of the production process, reduce production costs, and improve delivery efficiency.
Industry outlook for the future: is it a reshuffle or a new life after the cold winter?
Despite the many challenges facing the PV industry, the long-term outlook remains promising. China Exportsemi believes that in the next few years, the photovoltaic industry will continue to integrate and reshuffle. Some backward production capacity will be eliminated, and the leading enterprises will further consolidate their market position by virtue of their advantages in technology, cost, and brand. With the continuous progress of technology and the acceleration of industrial upgrading, the LCOE of the photovoltaic industry will continue to decline, thereby improving its market competitiveness. At the same time, the continuous emergence of new technologies and new products will also bring new growth points and development opportunities to the industry.
1. Global Market Opportunities:
The rapid growth of demand for clean energy in emerging markets such as India, the Middle East, and Africa provides a broad space for Chinese PV companies to expand.
2. Technology-Driven Growth:
With the breakthrough of energy storage technology, the application scenarios of photovoltaic + energy storage mode continue to expand, which will bring new incremental markets to the industry.
3. Policy support:
China's "carbon neutrality" strategy clearly states that the proportion of non-fossil energy consumption will reach 25% by 2030, which provides a strong policy guarantee for the long-term development of the photovoltaic industry.
Summary: New opportunities in adjustment
DAQO Energy's production reduction event is a landmark event under the current imbalance between supply and demand in the photovoltaic industry, which not only reflects the market dilemma, but also sends a positive signal of industry self-discipline and transformation and upgrading.
Through technological innovation and industry collaboration, the photovoltaic industry is expected to usher in new growth opportunities from short-term adjustments. In the future, competition will focus more on technological breakthroughs and quality improvements, rather than simple price competition. For enterprises, the cold winter is not only a process of reshuffling, but also a starting point for creating new opportunities.
Although the future of the photovoltaic industry is not smooth, firm technological progress and policy support will inject strong impetus into the industry. The choices and actions of DAQO Energy and its peers may become a key force in driving this industry to a new stage.
