The solar industry has been in a market downturn but solar cell conductive paste makers continue to see better profits. Taiwan-based Giga Solar, a silver, silver aluminum, and aluminum conductive paste maker, reported gross margin for first-half 2012 at 31%. Compared to other solar segments, a gross margin of 31% is a lot better than most firms which are currently suffering losses.
Seeing the strong financial performance of firms such as DuPont, Heraeus, and Giga Solar, the conductive paste segment has began to attract newcomers. Thintech Materials, a subsidiary of Taiwan-based China Steel Corporation (CSC), revealed plans to enter the aluminum and silver aluminum conductive paste for solar products segment on October 25. The firm has been focusing on target materials and heavy metal recycling. According to JC Tsuo, chairman of China Steel, entering the solar conductive paste market is an extension to Thintech's business as the firm has competitive advantages in obtaining silver and aluminum.
Thintech also plans to produce silver conductive paste and enter the upstream segment of silver powder materials. For other conductive paste makers, this may become a threat as material firms expand business segments.
Most conductive paste newcomers followed the path of Giga Solar and began with aluminum paste, then expanded to silver aluminum and silver pastes.
According to solar firms, aluminum paste makers have been aggressively lowering prices. The current price of aluminum paste is around US$22-25/kg, close to a 50% fall compared to the price in the same time period in 2011. This is likely a strategy from large-size conductive paste makers to keep out newcomers.
Giga Solar currently has close to 20% of share in the global silver aluminum paste market. Giga Solar has been using bundles (silver, silver aluminum, aluminum or including solar wafers) to keep customers. The current price of silver aluminum paste is around US$700/kg.
The market for silver conductive paste continues to be dominated by international firms DuPont and Heraeus. The combined market share of the two firms is around 80%. However, the two firms have been engaged in patent lawsuits with each other. Despite the increasing number of newcomers, solar cell firms have been reluctant to switch to new partners as the quality of silver conductive paste affects solar cell efficiency significantly, said international material firms.
The cost of silver conductive paste fluctuates with the price of silver, and the price of silver has been affected by economic conditions. In the beginning of October, the price hiked to US$36/ounce.