Author: Tian Si, Editor: Wang Dong, Han Chenggong

Four and a half years after shouting the slogan of "Global Top 3 Modules", Li Dongsheng should recognize the gap.

In the latest 2024 global module shipment list released by an authoritative organization, TCL Zhonghuan (SZ:002129) is not in the top 10. In the longer list surveyed by the domestic media, TCL Zhonghuan's photovoltaic module brand "Huansheng Solar" ranked 15th, with annual shipments of 7.995GW - which is a little more than one-tenth of the shipments of the world's top three Trina Solar.

Silicon wafer giant TCL Zhonghuan has always been interested in integration - LONGi has been the global leader from silicon wafers to modules. To this end, TCL Zhonghuan has invested more than 6 billion yuan in the past 6 years and is closely tied to Maxeon. However, its module business has been lacking in presence, and its overall operating performance has been dragged down in 2024.

Now, under the cold winter of the industry, TCL Zhonghuan's silicon wafer business has been hit by the market, and the company has lost more than 10 billion yuan in the past five quarters. Strengthening modules is a top priority, and TCL Zhonghuan needs to accelerate the extension of the industrial chain and build a stronger anti-risk ability.

An insider from TCL Zhonghuan told Huaxia Energy Network (public number hxny3060) that the company has made up its mind to carry out strategic adjustment and upgrading of the module business, and one of the important contents is to enrich the product category, from the past rigid shingles to BC, TOPCon and other technical routes.

"Even if we can't make it to the top three modules in the short term, we must squeeze into the top ten." The person said.

The module dream of the silicon wafer giant

As early as 2020, when TCL Technology became the owner of Zhonghuan, Li Dongsheng, chairman of TCL Zhonghuan, showed a strong interest in strengthening modules.

At the TCL New Kinetic Energy Strategy Conference held after the completion of the acquisition, Li Dongsheng put forward the goal of "the world's first comprehensive strength of new energy materials and the top three in modules", and said, "After the completion of the mixed reform, TCL will invest 6 billion yuan to promote the construction of high-efficiency shingled modules, the construction of DW smart chemical factory projects and the development of semiconductor devices, so that Zhonghuan will become a global leader." ”

As a move to implement the TOP3 module strategy, in China: TCL Zhonghuan has continuously increased its stake in Huansheng PV, and by the end of 2024, the joint venture with SunPower will become a wholly-owned subsidiary. Overseas: Increasing the acquisition of Maxeon's stake to a controlling stake in the module business and overseas markets.

Maxeon, formerly known as SunPower Corporation, a long-established photovoltaic factory founded in 1985, has thousands of patents including shingled module technology, TOPCon, IBC, etc., and has multiple production bases in France, Malaysia, Mexico and the Philippines.

In November 2019, Central subscribed for Maxeon's additional share capital for US$298 million, becoming the second largest shareholder with a 28.8% stake. In the following years, Li Dongsheng led TCL Zhonghuan to repeatedly increase its investment in Maxeon through equity subscription and other means.

According to statistics from Huaxia Energy Network, TCL Zhonghuan's cumulative investment in Maxeon has reached 890 million US dollars, equivalent to 6.157 billion yuan. However, Maxeon, which has been losing money year after year, has brought nearly 1.8 billion yuan of investment losses to TCL Central in the first half of 2023-2024.

Although a lot of money has been invested, it is a pity that in the past few years, TCL Zhonghuan's module sector has only 22GW of shingled module production capacity, and Huan Sheng PV has not even squeezed into the TOP10 list of modules. According to the 2024 semi-annual report, TCL Zhonghuan's photovoltaic module revenue accounts for only 17%, and the battery business has so far relied on external procurement.

"The relative lack of competitiveness of the new energy battery module business has further dragged down the operating performance at the bottom of the industry cycle; In addition, the company's overseas subsidiary, Maxeon, is in a period of business transformation, which has a certain impact on the performance during the reporting period. TCL Zhonghuan's 2024 performance forecast makes the above comments on the module business.

Huaxia Energy Network noticed that TCL Zhonghuan modules have not been able to open up the situation for a long time, which is related to its insistence on the tiling technology route. One of the reasons for TCL Zhonghuan's acquisition of Maxeon is that it is optimistic about its patents on shingling technology.

Shingling is a new type of photovoltaic module packaging technology that increases the power density of modules, that is, the overlapping of cells is used to fill the gaps between cells in traditional module packaging, thereby increasing the power generation area.

Around 2019, the technology has attracted leading layouts such as JinkoSolar (SH:688223), LONGi Green Energy (SH:601012), JA Solar (SZ:002459), Seraphim, and Canadian Solar (SH:688472). However, due to the high patent barriers, each company withdrew one after another, leaving only TCL Zhonghuan in China. Due to the lack of industry ecological support, it is difficult to reduce the high cost of shingled modules, and eventually go to the niche.

As of the end of June 2024, Huan Sheng PV has shipped a total of 30GW of shingled modules worldwide. Since the release of the first shingled module in early 2018, the shipment volume in six and a half years is less than the average TOPCon shipment of the top 10 module leaders in 2024 (35GW).

It is also in 2024 that the silicon wafer business that Li Dongsheng has been worried about will finally break out in crisis. According to the 2024 semi-annual report, TCL Zhonghuan's silicon wafer revenue was 10.432 billion yuan, a year-on-year decrease of 61.31%; The gross profit margin was -9.25%, down 34.13% year-on-year.

TCL Zhonghuan's wafer production capacity is as high as 190GW, ranking first in the world. The above-mentioned financial report data shows that the road of relying solely on silicon wafers to make profits can no longer go on. TCL Zhonghuan must begin a strategic realignment and restructure its module business to repair its deteriorating performance.

Major restructuring of the component business

"This year's performance of Zhonghuan is the worst year since TCL entered the photovoltaic industry, with revenue falling by more than 50%. Even in the last cycle, Central did not have a half-year loss." On September 19, 2024, in CCTV's "Dialogue" program, Li Dongsheng sighed.

From the second half of 2024, TCL Zhonghuan has carried out a series of strategic adjustments. With the announcement of the semi-annual performance of more than 3 billion yuan, Zhonghuan urgently "changed the commander", and in less than two months, the CEO position realized a rapid transition from Shen Haoping, Li Dongsheng to Wang Yanjun.

In terms of operation, the wafer business has shrunk significantly, while the module segment has been continuously strengthened. In August 2024, TCL Zhonghuan established a module global marketing center and included the galvanic cell module marketing department. In December, Huan Sheng PV announced that it had officially changed its name to "TCL Solar" at the Montpellier International Energy Exhibition (Energaia) in France. TCL Zhonghuan said that this move will strengthen the global influence of this brand.

A person in charge of TCL Zhonghuan said that TCL Solar will work with the brands and channels of Maxeon and SunPower to further expand the global module market. Specifically, Maxeon is mainly responsible for the U.S. market, while TCL Solar is mainly responsible for the expansion of the non-U.S. market.

In terms of technical routes, although TCL Zhonghuan still said that it should adhere to and optimize shingled products, its actual actions have obviously shifted to TOPCon and BC.

In terms of BC routes, in November last year, TCL Zhonghuan, together with Maxeon, LONGi and Aiko (SH:600732) shared the stage at the "12th bifi PV Workshop 2024 Zhuhai" international summit in Zhuhai, expressing their intention to build a BC ecosystem together.

Immediately after the Japan International Solar Photovoltaic Exhibition in February this year, TCL Zhonghuan launched its new BC module - an N-type bifacial double-glass BC module with a maximum output power of 665W and a maximum efficiency of 24.6%. Huaxia Energy Network has learned that this new BC module may be mass-produced in the middle of this year.

TCL Solar's new BC module unveiled at the Jinan PV Exhibition

At the same time, TCL Zhonghuan has put the heavy responsibility of shipping on TOPCon modules, which not only helped Huansheng win several large orders of 100 MW or even GW modules in the centralized procurement of N-type modules of central state-owned enterprises, but also made it a strategic partner of distributed new energy investment and developer Bubi New Energy for P-type and N-type TOPCon PV modules in 2024-2025. In December last year, TCL Zhonghuan released the TOPCon copper grid module to achieve zero silver content.

At the Jinan Photovoltaic Exhibition on March 5 this year, Wang Wei, vice president and general manager of TCL Zhonghuan's global marketing center, said that through a deep insight into the distributed market demand and its own research and judgment on the product technology route, TCL Solar is currently building an N-type product matrix covering BC, TOPCon, and shingling technology routes.

In addition, TCL Zhonghuan is also actively investing in the construction of new production capacity, and the first phase of the 10GW high-efficiency solar module smart factory project of Hohhot Huansheng New Energy with a total investment of 4.566 billion yuan was completed and put into operation in January this year. In November last year, Maxeon also announced that it would build a 2GW PV module manufacturing plant in New Mexico, USA.

After this series of operations, TCL Zhonghuan's module business has obviously improved. Huansheng was selected by Bloomberg New Energy Finance in the fourth quarter of 2024 as the world's first-tier PV module manufacturing suppliers, as well as the top 10 domestic distributed module shipments in 2024. In January this year, it ranked second in the PV module bidding list with a winning capacity of 2.311GW.

Can you realize your dream of "Top 3 Components"?

It is not surprising that TCL Zhonghuan has shifted from a single shingled module to a diversified technical layout.

TOPCon modules will account for 70% of shipments in 2024, becoming the absolute mainstream of the industry. Although BC accounted for only 5% of the market in the same period, it has a tendency to rise from the perspectives of technology, ecology and market.

"If the potential of TOPCon cells reaches its limit, the efficiency will be further improved by adding BC technology." Zhang Xuenan, vice president of TCL Central Research Institute, said.

At present, in addition to LONGi Green Energy and Aiko Co., Ltd., GCL Integration (SZ: 002506), Yingfa Ruineng, Gaojing Solar, Jinko Solar, JA Solar, Tongwei Co., Ltd. (SH: 600438), Yiyi New Energy, and Junda Co., Ltd. (SZ: 002865) also have BC products or pilot line layouts. In the domestic market, the application of BC module technology by central state-owned enterprises is also gradually expanding, and some projects have set up separate BC bids, and many of them have reached the GW scale.

Zhang Xuenan predicts that in the next 3-5 years, all TOPCon production lines will change to the direction of BC technology, and BC technology will complete the transformation process from niche to mainstream.

It can be seen that TCL Zhonghuan's current technical layout is implemented around the mainstream direction of the industry and expanding the influence of components. TCL Zhonghuan also has the technical strength to do so after winning Maxeon - Maxeon has a large number of TOPCon and BC patented technologies. Especially for BC technology, Maxeon is the originator of IBC batteries, and its IBC products have been iterated for more than 20 years, and have broken the industry conversion efficiency record many times.

However, even if the technical direction is right, it is not easy for TCL Zhonghuan to become the world's top 3 in components.

The BC has not yet been mass-produced, and it will take time for the market to take off. As for the TOPCon module for the mainstream market, TCL Zhonghuan's entry into the market is a little late. Now that the dividend period of TOPCon technology has passed, in order to stand out in the fierce involution, it needs not only the blessing of revolutionary core technology, but also sufficient production capacity to follow up - these all require money.

Compared with the current production capacity scale of the world's top 3 enterprises, TCL Zhonghuan needs to invest at least 100GW of production capacity to have the strength to fight, which will be a huge amount of money.

In the 5 quarters, TCL Zhonghuan has a total loss of about 11 billion yuan (a loss of 2.772 billion yuan in the fourth quarter of 2023, a pre-loss of 8.2-8.9 billion yuan in 2024, and a total loss of 10.972-11.672 billion yuan), cash flow risks have begun to be exposed, and there is no possibility of super-large-scale capacity construction in the short term, unless it is to refinance in the capital market.

(TCL Zhonghuan Chairman Li Dongsheng).

It can be expected that in the current life-and-death situation of photovoltaic modules surrounded by giants, TCL Zhonghuan is becoming more and more difficult to realize the dream of "top three modules", and even if it wants to occupy a place, it will face a cruel fight. As a latecomer, how does TCL Central break the game?

At the 2025 Annual Meeting of the China Development Forum on March 23, Li Dongsheng said, "The current restructuring of the global industrial chain is not only a challenge, but also an opportunity. I believe that only by adhering to the concept of openness and win-win, taking technological innovation as the link and coordinated development as the path, can we achieve the resilience and sustainable growth of the global supply chain. ”

Under the general trend of globalization, building production capacity in the world with overseas technological advantages and seeking international capital cooperation to make up for the shortcomings of insufficient production capacity may be a direction in which TCL Zhonghuan is expected to make a major breakthrough.