Companies on the upstream end of the solar industry–such as silicon producers and wafer makers–will fare better over the next year than cell and module makers, according to a new Reuters analysis.
As the industry is expected to undergo consolidation this year, the thinking is that the production of wafers and silicon will be less affected by pricing pressure caused by oversupply.
"While we forecast margin erosion through the whole solar value chain, we believe investors should focus on the beginning of the value chain given longer-term contracts, more stable cash flows and the tighter supply/demand balance," HSBC analysts wrote.
Vertically integrated solar companies are also expected to fare better in the tough economic times ahead.
Read the full analysis at the link below.