Despite cold market conditions, China-based first-tier integrated solar firms have moved to expand capacity in an effort to lead the industry. China-based second-tier solar firms have halted capacity expansion due to the weak demand, according to industry sources.

Many solar firms have been hit by weak market demand and have been reducing capacity.

According to international equipment firms, China-based first-tier solar firms plan to follow capacity expansion targets set earlier. Total annual capacity is likely to expand 40GW in 2011 according to the orders for solar cells made by China-based firms. However, global demand for solar cells in 2011 might only be around 15GW, hence an oversupply is very likely. China-based solar firms have stronger distribution channels causing the firms to run at full capacity even in May while other firms have been suffering from lower sales.

Whether or not the situation will continue through June is unpredictable, said industry sources.

China-based vertically integrated firms include Suntech, Yingli, GCL and LDK.