Solar cell maker Neo Solar Power will expand capacity to 1.8GW by the end of 2011, which is earlier than previously scheduled, due to a positive order outlook, according to company chairman Quincy Lin, adding that the company has raised its production forecast to 1.1GW from 1GW. It produced 530MWp in 2010, ranking in the top-ten globally.

An oversupply could be an issue if judging strictly by overall solar cell capacity, but taking into consideration actual output, quality, efficiency rate and cost advantages, undersupply could continue in 2011, Lin said.

On whether Taiwan's solar cell industry can turn out like the DRAM sector, Lin indicated that the cost structures of the two industries are different. Materials account for 80% of a solar cell manufacturer's cost, and 30% of a DRAM maker's cost is equipment amortization and depreciation, and thus during economic downturns, the solar cell industry is less affected, Lin said.

Neo Solar projects solar system installation in 2011 will increase 20% from about 16-18GW in 2010. Though third-quarter demand could decline due to several countries cutting incentives, the market will once again recover at year's end due to more cuts in 2012, according to the company, noting that thin-film will account for 15% of total supply.

Orders for 2011 will exceed capacity by 10%. Europe and Asia will each represent 35-40% of shipments. North America and Japan will combine for 25-30% versus 5% in 2010.

Neo Solar currently has NT$6 billion (US$204.12 million) in cash, which includes NT$5 billion in syndicated loan.s Its capital expenditure will total about NT$11 billion for solar cell and wafer capacity expansion. The company will complete a GDR issue before the third quarter.