"Seven Major Chinese Solar Panel Companies Post 5.2 Trillion Won Loss Last Year Due to Oversupply"

Nikkei: "First Deficit Since 2017... International Friction Over Cheap Export of Excess Inventory"

Nikkei reported on May 6 that the combined net loss of the seven major Chinese solar panel companies reached 27 billion yuan (approximately 5.2 trillion won) last year.

AFP Yonhap News

According to the report, this is the first time since 2017, when comparable statistics became available, that these companies have recorded a loss. Of the world's top 10 solar panel manufacturers by shipment volume, nine are Chinese companies. Nikkei analyzed the 2024 financial statements of seven listed companies among them that mainly focus on solar cell production.

The newspaper stated that while these companies posted a combined profit of 41.8 billion yuan (about 8 trillion won) in 2023, five out of the seven suffered significant losses last year, and the remaining two recorded only very small profits.

Demand for solar cells increased after energy prices rose in 2022 due to the war in Ukraine. Their popularity was also attributed to the fact that installation is easier compared to wind turbines.

However, Nikkei explained that as production surged, leading to oversupply, the business performance of Chinese companies deteriorated.

The newspaper analyzed, "China is a massive market, accounting for more than half of new solar panel installations, but as domestic supply could no longer be absorbed, exports increased." It added, "Like steel and electric vehicles, solar cells have also caused friction in the international community as Chinese companies sold excess inventory cheaply abroad." The report further noted that although Chinese companies have started adjusting production volumes, there is little likelihood of a short-term improvement in their performance.

Okazaki Junko, chief researcher at the Resource Comprehensive System and an expert on the Chinese solar cell market, told Nikkei, "It seems that Chinese companies believe that as long as they survive while others are weeded out, they will be able to make profits in the long term."