According to the CPIA official account of the China Photovoltaic Industry Association, the China Photovoltaic Industry Association recently held a "Forum on High Quality Development of the Photovoltaic Industry" in Beijing. The meeting made it clear that we should strengthen the fight against vicious competition in sales at lower than cost prices, encourage industry mergers and reorganization, and unblock the market exit mechanism.

Since last year, the price of photovoltaic industry chain has continued to decline, and the problem of backward production capacity is prominent. According to the data released by the Silicon Industry Branch of China Nonferrous Metals Industry Association on May 15, the current price of polysilicon has exceeded the cash cost of all enterprises in production.

The author believes that the current problems faced by the photovoltaic industry can be specifically analyzed from two aspects.

On the one hand, many cross-border photovoltaic enterprises have fallen into the bottleneck of development. Some are backward in technology and some are suffering from serious performance losses. It can be said that under the influence of market laws, most of the first batch of cross-border enterprises fell.

Two years ago, the photovoltaic industry continued to enjoy a high level of momentum, and capital from all parties was attracted into the industry. Many enterprises from across the border wanted to share in it. When the demand for industrial chain products is strong, some cross-border enterprises also enjoy the industry dividend. However, with the continuous expansion of production capacity, the market has entered the stage of oversupply. Cross border enterprises with insufficient technology accumulation and financial strength face the risk of project failure, and backward production capacity is facing clearance. Since this year, photovoltaic projects of several cross-border enterprises have been terminated. For example, ST Linda plans to stop investing in the construction of Tongling 20GW efficient photovoltaic cell industry base project.

On the other hand, many of the old PV listed companies that were once quite popular have reached the edge of delisting.

As of the closing of May 23, under the overall upward trend of the photovoltaic concept plate, ST Aikang's share price fell to 0.86 yuan/share, and ST Sunshine's share price fell to 0.74 yuan/share for 14 consecutive trading days, which has been below 1 yuan/share for 6 consecutive trading days.

The current situation of ST Aikang and ST Sunshine is not an exception in the photovoltaic industry. So far, there have been 7 A-share photovoltaic enterprises "wearing hats".

From the perspective of the development situation of the photovoltaic industry, China Photovoltaic Industry Association encouraged mergers and reorganization at this time, providing ideas for the high-quality development of the industry, which means that the photovoltaic industry has gone through multiple cycles of development, and has reached the critical period of survival of the fittest. The photovoltaic industry has gradually shifted from rapid expansion to callback, and it is an inevitable trend to eliminate some enterprises.

The meeting also mentioned that the photovoltaic industry is an industry with a high degree of marketization, and it is more appropriate to solve the current industry dilemma through marketization, but it should also give full play to the role of the visible hand of the government.

In my opinion, through merger and reorganization, resources in the industry will gradually concentrate on advantageous enterprises. At the same time, by integrating resources, competitive enterprises can expand their scale and enhance their market competitiveness to better cope with market changes and competitive pressures. In addition, the backward capacity of the photovoltaic industry relies on low prices to seize the market, squeezing the industry's profit space and disrupting the market order. Mergers and acquisitions help enterprises optimize resource allocation, improve capacity utilization, reduce ineffective competition, and further alleviate the industry's predicament.

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