A US company has become the world’s most valuable solar manufacturer for the first time since 2018, overtaking its Chinese competitors who have been impacted by a price war and trade barriers set up by Washington.
According to Bloomberg, First Solar Inc. saw a 1.5% increase in its stock price on Friday, May 17, reaching a market capitalization of $21.15 billion. This surge pushed the Arizona-based American company ahead of the Chinese company Sungrow Power Supply Co., whose stock price dropped 4.2% in Shenzhen, bringing its market value to about $20.85 billion Renminbi.
This marks the first time since 2018 that a Chinese company has not been the most valuable solar equipment manufacturer. China has dominated global solar panel production, controlling over 80% of the supply chain. However, Chinese factories are currently facing weak domestic demand, overcapacity issues leading to price declines and shrinking profit margins.
Another major Chinese manufacturer, Longi Green Energy Technology, reported a net loss of 2.35 billion RMB in the first quarter of this year, compared to a net profit of 3.64 billion RMB in the same period of 2023. The Chinese government is trying to export excess capacity abroad, but facing increasing resistance from more countries.
Janet Yellen, the US Treasury Secretary, warned about the harm caused by Chinese government subsidies in the solar panel industry during her visit to China last month. She stated that these products flooding the global market pose a threat to US companies, workers, and the global economy. Shortly after Yellen’s warning, the Biden administration announced a tariff increase on $18 billion worth of Chinese imported goods, including steel, aluminum, semiconductors, batteries, critical minerals, solar panels, and cranes. This includes raising tariffs on Chinese electric vehicles to 100% and on solar panels to 50%.
The EU has also criticized China’s overcapacity issue and launched investigations into Chinese dumping of products such as electric vehicles. Ursula von der Leyen, President of the European Commission, warned China on May 6 that the EU is ready to use all available trade tools to defend its economy.
First Solar, the largest solar panel manufacturer in the US, is a major beneficiary of the US tariff actions against China. The company sells solar panels in the US, and its expansion plans will receive subsidies from the Biden administration’s Inflation Reduction Act.
First Solar is not only the world’s largest thin-film photovoltaic component manufacturer but also the largest solar panel manufacturer in the Western Hemisphere.