TAIPEI–The local solar energy sector is watching closely for a final ruling to be issued by the U.S. Department of Commerce (DOC) next week on anti-dumping financial penalties affecting Taiwanese solar cell manufacturers before it decides how to tackle the issue, market analysts said Saturday.
The analysts said that if the U.S. authorities uphold their preliminary ruling on the issue, local solar cell suppliers will be forced to relocate their production lines overseas at a speedier pace in order to avoid anti-dumping tariffs.
In July, after finding that Taiwan’s solar cell exports had caused material damage to the U.S. market due to selling solar cell products at unfairly low prices, the DOC laid down a preliminary ruling imposing an average of almost 25 percent tariffs on local solar cell exporters.
The penalties are heavier than a previous market expectation of 10 to 15 percent anti-dumping tariffs, which would have been an acceptable range for local solar sell suppliers, the analysts said.
Solartech Energy Corp. (�@�����q����), one of Taiwan’s leading solar cell suppliers, has kicked off an overseas production plan amid fears of the impact of the U.S.-imposed tariffs, which will make Taiwan’s exports more expensive and hurt the local sector’s competitive edge against exporters from other countries.
The DOC is scheduled to issue a final decision Dec. 15 on whether it will leave its earlier ruling unchanged or make adjustments in the financial penalties.
Analysts said that as the U.S. is the fifth-largest solar energy market in the world, accounting for 20-30 percent of Taiwan’s total solar panel exports, Taiwan cannot afford to lose the market and companies will have no choice but to relocate their production lines overseas to skirt the upcoming financial penalties.
Even if affected Taiwanese solar cell firms start to build production bases overseas now, they will still need six to nine months to have their new plants ready for production, which means the U.S. anti-dumping tariffs will still affect local exporters for some time, they said.
Jason Huang, an analyst with Taipei-based market information advisory firm TrendForce Corp. (����), said that if the DOC maintains the anti-dumping tariffs ruled in the preliminary ruling, it will be hard for Taiwanese solar cell makers to make a profit.
In addition, Huang said that the global upstream solar cell business is still faced with an oversupply, so even if Taiwanese firms successfully relocate their production bases overseas, they could continue to feel the pinch of the impact resulting from price competition.
Huang said that Taiwan’s solar energy firms should extend their reach to downstream products, such as solar modules or systems, from the upstream solar cell production, to have a diversified product mix to cushion the oversupply impact.