Solar energy stocks skyrocket on the Gretai as investors bet on a sunny business future

This article was written by Susan Yu and published by the Taiwan Journal on March 24, 2006. It reports that in recent weeks, the rapid development of the solar energy business in Taiwan has propelled stocks in this sector to new highs. Companies such as Motech Industries Inc. (Taiwan's largest and world's 10th-largest supplier of solar cells) and E-ton Solar Tech Co. Ltd. (Taiwan's second-largest solar cell maker) are doing particularly well.

In March 2006, when E-ton's shares were traded on the over-the-counter Gretai Security Market for the first time, its price skyrocketed from US$6.73 to US$26.9 per share, making it the highest-priced stock on the Gretai. The company has continued to perform well since then.

Motech Industries were listed on the Gretai in 2004. Since then, its share price has risen from US$1.2 per share to US$27.8 per share. The share prices of other solar cell wafer makers in Taiwan have also shot up significantly.

The considerable rise of solar energy stock prices reflects the belief of Taiwanese investors that solar energy will turn out to be the most promising alternative to fossil fuels in the next decade. According to the Photonics Industry and Technology Development Association in Taiwan, the solar energy photonics market is expected to grow at 30 percent per annum from 2005 to 2007. Other foreign and domestic reports have predicted that the solar energy boom will last until 2010.

Currently, there are about 40 companies in Taiwan's solar energy photonics industry, all of which are relatively new ones. Among these 40 companies, 7 produce solar cells and 3 produce solar cell wafers. The other companies assemble these components into panels or manufacture and install integrated systems.

In related news, an international solar energy research and consultancy company recently warned that the solar energy industry could see a downturn in 2006 due to a shortage of polycrystalline silicon, or polysilicon, the material used to fabricate the low-grade wafers needed to produce general-use solar cells. The company reported that although the global market for solar energy photonics registered a 30-percent growth in 2005, the solar energy market in 2006 will grow by only 10 percent, as a result of the polysilicon shortage. Indeed, the whole sale price for polysilicon went up from US$20 per kilogram in mid-2004 to more than US$90 per kilogram at present.

Finally, this article reports that several semiconductor and petrochemical companies in Taiwan have also invested, or are preparing to invest, in the solar energy market.