Solar PV

How the chain fits together

The chain on this map runs from purified silicon to the finished panel and the electronics that connect it to the grid:

• Polysilicon is melted and grown into ingots, which are sliced into solar wafers.
• Wafers become solar cells, where the technology race between TOPCon, back-contact and heterojunction designs is fought.
• Cells are sealed between solar glass and a back layer with encapsulant film to make solar modules.
• Solar inverters, built around power semiconductors, connect the modules to the grid.

China dominates the main stages. In 2024 it made 94% of the world's polysilicon, 96.5% of its wafers, 90% of its cells and 86% of its modules (IEA PVPS Task 1, October 2025, pp. 7 to 11). By CPIA's count, China had more than 1,100 GW of capacity at each of polysilicon, wafers, cells and modules at the end of 2025, far above global demand (JA Solar 2026 interim report, p. 30).

Demand fell in 2026

China's new installations were 72.07 GW in the first half of 2026, down 66%, after the shift to market-based power prices made project returns less certain (LONGi 2026 interim report, p. 10). Distributed solar made up 58.8% of the total, overtaking utility-scale plants for the first time (Jinko 2026 interim report, p. 9). Sungrow cites third-party data putting global installations at 177 GWac, down 43% (Sungrow 2026 interim report, p. 11).

Exports rose 24.3% in value to about US$17.18bn, but Jinko says almost all of the increase came from a rush before China ended the export VAT rebate on solar products on 1 April; in May, module exports fell 26.7% from April (Jinko p. 9). Cells were the exception, with exports up 36.8% in the half as other countries build module assembly faster than cell capacity (Drinda 2026 interim report, p. 11).

Where China is strong

• Scale at every stage. Tongwei shipped about 155,300 tonnes of polysilicon, TCL Zhonghuan 53.9 GW of wafers, and Jinko Solar and LONGi about 30 GW of modules each in the half (Tongwei 2026 interim report, p. 11; TCL Zhonghuan 2026 interim report, p. 12; Jinko p. 10; LONGi p. 12).
• Technology. Back-contact modules were more than 65% of LONGi's module sales, and Aiko's ABC modules earned about 9% while most rivals earned close to zero (LONGi p. 12; our calculation from Aiko 2026 interim report, p. 138).
• Materials and electronics. First Applied says it has about half the world market for encapsulant film, and Sungrow tops BloombergNEF's inverter bankability ranking (First Applied 2026 interim report, p. 16; Sungrow p. 12).

Where the weak points are

• Prices below cost. Polysilicon makers ran at 33.8% of capacity and sold below cash cost; Daqo sold at ¥30.63 a kilogram against a cash cost of ¥34.75 (Daqo 2026 interim report, p. 10). Solar glass prices fell to around cash cost (Flat Glass 2026 interim report, p. 8).
• Losses. Tongwei lost ¥5.12bn in the half, LONGi ¥3.68bn, TCL Zhonghuan ¥3.20bn, Jinko ¥3.08bn and JA Solar ¥2.66bn. Trina Solar lost ¥2.89bn before one-off gains on its T1 Energy shares (Tongwei p. 6; LONGi p. 8; TCL Zhonghuan p. 11; Jinko p. 6; JA p. 8; Trina 2026 interim report, p. 7).
• Trade barriers. US duties now reach Chinese companies' plants in Southeast Asia, with preliminary duties in 2026 on India, Indonesia and Laos, while India and Europe favour local manufacturing (JA pp. 29, 30; Jinko p. 8).
• Silver. Jinko says silver paste overtook polysilicon as the largest cost item in a module after silver prices surged (Jinko p. 8).
• Patents. In March 2026 the US International Trade Commission opened a Section 337 investigation at First Solar's request, which JA Solar says bears directly on Chinese makers' access to the US market (JA p. 30).

Policy has moved from appeals to rules: mandatory energy and efficiency standards take effect on 1 January 2027, the industry has a cost-accounting standard, and eight polysilicon makers pledged in August not to sell below full cost (Daqo p. 10).

Margins along the chain

The chart below sets reported gross margins side by side, from -74.4% at Daqo's polysilicon to 42.7% at Sungrow's inverter segment. Bars to the left of the line are negative: the product sold for less than it cost to make. The bases differ, so the chart shows where margin sits rather than a like-for-like ranking.

Our view: in solar the money has moved away from the silicon. The stages China built at the largest scale, polysilicon, wafers and modules, sold at or below cost in the first half of 2026, while the concentrated or differentiated suppliers around them, inverters, encapsulant film and back-contact modules, kept healthy margins. Sales abroad also paid better at almost every stage that reports them, which is why glass, cell and module makers are building plants in Southeast Asia and the Middle East.