By Cameron Chai
JA Solar Holdings, a producer of solar cells and solar power products, declared that it has signed a definitive agreement to completely own Silver Age Holdings that has 100% ownership in Solar Silicon Valley, a manufacturer of solar wafers based in China.
Solar Silicon Valley has a wafer manufacturing facility with a production capability of 485MW per annum. It also manufactures quartz crucibles, a material that is useful to solar manufacturing industry.
According to Dr. Fang Peng, JA Solar, this agreement is a significant step in their cost optimization strategy with the help of selective vertical integration. He also stated that Solar Silicon Valley applies resourceful technologies to offer high-quality wafer substrates for solar cell products manufactured by JA Solar. If the transaction ends successfully, the internal wafer capacity manufactured by JA Solar may raise to nearly 785MW, resulting in a constant supply of less expensive wafers.
Since cost of wafer considerably influences the total manufacturing cost of JA Solar's solar cells, improved internal wafer capacity enables JA Solar to increase gross profits and get benefited from this integration. Due to this collaboration, Solar Silicon Valley and JA Solar may receive benefits resulting from efficient raw material sourcing, economies of scale, and process optimization.