Falling product prices have been causing solar wafer and cell firms to face shrinking gross margins and possible losses. While upstream polysilicon prices have been relatively rigid, ndustry sources noted that solar wafer firms might suffer more than solar cell makers in the third quarter.

Taiwan-based solar wafer maker Green Energy Technology (GET), which has been operating at full capacity, is expected to report net loss of NT$587 million (US$20 million) for the third quarter, the sources said. Many Taiwan-based solar wafer makers who are expected to have similar financial results for the third quarter have lowered their utilization rates.

Solar cell firms started to see revenues fall at the very beginning of the second quarter, while solar wafer firms did not suffer sales declines until May. Therefore wafer firm's losses were smaller than cell firms in the second quarter.

In third quarter, downstream solar cell firms have been successful in requesting lower quotes of solar wafers but upstream polysilicon firms still maintain rigid prices for supplies to wafer clients. Solar wafer firms have been squeezed from both ends, the sources commented.

China-based firms have been influencing the global solar wafer price trend. If China-based solar wafer makers keep quoting low prices, it is unlikely for Taiwan-based counterparts to rebound from losses, according to industry sources.