Tai Mei Ti A P P·2026-01-05 10:18Core Viewpoint - The photovoltaic (PV) industry is undergoing a structural change in its cost dynamics, with silver paste replacing silicon material as the primary cost variable from 2024 to 2026, significantly impacting the competitive landscape and survival of companies in the sector [1][2]. Cost Structure Changes - In January 2024, silicon material's cost share decreased to approximately 10%-12%, while silver paste's share rose to 10.5%, marking a shift in cost dominance [2]. - By January 2025, silver paste's cost share surged to 14.2%, surpassing silicon material at 11.3%, indicating a reversal in cost structure [3]. - In January 2026, silver paste's share increased to 16%-17%, while silicon material's share fell to 9.9%, solidifying silver paste's dominance in cost structure [4][7]. Supply and Demand Dynamics - The global supply of silicon material is projected to exceed demand significantly in 2026, leading to a price drop to around 46,000-53,000 yuan per ton, which is below the cost line for many second and third-tier companies [8]. - The technological maturity in silicon material and wafer production has reached a plateau, limiting further cost reductions [9][10]. Silver's Unique Position - Silver's cost dynamics are driven by industrial demand rather than its traditional roles, with the industrial sector accounting for nearly 60% of silver demand in 2024 [15]. - The photovoltaic sector represents only 25%-30% of global industrial silver demand, indicating that it cannot dictate silver prices [18]. - The supply of silver is largely dependent on the production of other metals, making it less responsive to price changes [19]. Technological Innovations - The industry is witnessing a shift towards silver reduction technologies, with three main approaches emerging: gradual silver reduction, silver-coated copper paste, and copper plating [25][31][36]. - Silver-coated copper paste is expected to become the mainstream solution by 2026, offering significant cost advantages [31]. - Copper plating technology is anticipated to lead the industry by 2027, providing a complete alternative to silver and significantly reducing costs [36][47]. Future Outlook - The silver price is expected to remain high and volatile through 2026-2027, driven by supply-demand imbalances and industrial demand growth [50]. - Companies that can effectively implement silver reduction technologies will gain a competitive edge, as the ability to manage silver costs becomes a critical survival factor [52][53].