China Mulls Protecting Solar Tech Dominance With Export Ban

Jan 27, 2023 10:27 AM ET
  • Export ban considered for technology used to make solar wafers
  • China makes up 97% of worldwide output for the wafers

China is taking into consideration an export ban that would assist the country maintain its significant dominance in solar manufacturing equally as various other nations are trying to strengthen their markets.

China's Ministry of Commerce and Ministry of Science and also Technology are looking for public comment on adding some manufacturing methods key to creating advanced solar wafers on to its checklist of technologies it prohibits exporting. Wafers are ultra-thin silicon squares that are assembled into solar panels, and China make up 97% of international output.

The relocation emphasizes the expanding strategic importance federal governments are putting on solar manufacturing as the technology becomes the earth's greatest source of new energy. Nations from the United States to India are attempting to develop residential supply chains to chip away at China's advantage.

China's Solar Production Dominance

Chinese companies are increasing their lead in wafer manufacturing capacity

" Beijing as well as the market leaders in China's solar sector are certainly worried about initiatives from the United States, EU, and India to establish organic solar production markets, so these current tech export controls may quite possibly be a reaction," claimed Cosimo Ries, an analyst with Trivium China. "Beijing is seeking to slow down the speed at which its competitors can establish their very own supply chains."

The action is still in the general public consultation phase and no choices have been made yet. Still, it's coming just months after the US passed the Inflation Reduction Act, that includes subsidies for clean-tech manufacturing and also has actually stimulated a wave of announcements for new factories.

Chinese firms have spent the past years creating advanced technology to create larger, thinner wafers that have actually played a big component in reducing the price of solar power by more than 90%. If foreign suppliers have to utilize older wafers, it will certainly decrease the price competition of their panels, Ries claimed.

Taking into consideration China's dominant position in wafers as well as the segment's reasonably high barriers for access, it's reasonable for China to think about the ban to avoid leaking technology to abroad gamers, Daiwa Capital Markets analysts claimed in a study note Thursday.

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