The silicon price hike is shaving the profit margins of the Chinese solar product makers. "They are facing an industrial reshuffle," a senior executive at a Ningbo solar company said to the China Business News. Such a statement came after the tidings that the German-based Conergy, a leading company in the field, would suffer great losses this year.

The figures provided by the Chinese Semiconductor Association show that the price for the 6-inch polycrystalline silicon wafer nudged up to nine dollars in the third quarter, more than ten times the previous price. Nine dollars is the bottom line for the manufacturers of the solar battery.

Seventy percent of the cost in making solar batteries goes into the silicon wafer so this price hike will cost all solar companies an arm and a leg. Moreover, since 2004, their profits have taken a nosedive. In 2005, the gross profit margin of Suntech Power in Wuxi City was 30.3 percent. This year, the margin was only 10.6 percent in the first quarter.

"Domestic solar companies largely depend on the imported silicon. Its price spiral will definitely influence those companies," remarked a senior executive.

For more details, please read the full story in Chinese. ( http://www.china-cbn.com/s/n/000004/20071218/020000063152.shtml)

(China.org.cn December 18, 2007)