KUALA LUMPUR (April 22): Solar photovoltaic (PV) module manufacturers in Malaysia owned by China-based players could face the risk of being phased out due to the latest US-imposed duties on solar imports from the country, an industry group representing the sector said.
These Chinese-owned firms were almost “killed off” by the previous round of tariffs imposed by the US, as rising costs have made operations in Southeast Asia unsustainable, according to Malaysia Photovoltaic Industry Association (MPIA) president Davis Chong.
According to the Malaysia External Trade Development Corporation (Matrade), exports of Malaysian-made PV products totalled RM37.4 billion in 2024. Of this, RM12.5 billion — or 33.4% — were shipped to the US.
This marked a reversal from two years of growth up until 2023, which saw RM16.1 billion worth of exports (34.5%) to the world's biggest economy. The exports may include products from US-based manufacturers with operations in Malaysia, such as First Solar Inc.
"More Chinese solar panel manufacturers [are] expected to exit the Malaysian market," Chong said.
"We believe these manufacturing factories have been shutting down in the region and gradually relocating to non-Southeast Asia countries. Hence, the additional US tariffs will have no further impact on Malaysia's solar manufacturing industry," he said.
The US reportedly imposed a blanket 9% tariff on solar cell imports from Malaysia — which supplies 14% of its solar cell imports — on Oct1 last year, singling out five companies for duties ranging between 3.4% and 123.94%.
This included two China-backed firms with factories in Malaysia: JinkoSolar Holding Co Ltd (3.47%) and Baojia New Energy (123.94%), amid rising US-China tensions.
In its latest move, the US imposed an additional 8.59% anti-dumping and countervailing duty (CVD) on Malaysia — the lowest among four Southeast Asian nations affected alongside Thailand, Cambodia and Vietnam. However, certain Malaysia-based companies were slapped with duties as high as 81.24% due to non-cooperation with investigations.
Prior to this, manufacturers such as Longi Green Technology Co, which has three plants in Selangor and Sarawak, had reportedly halted expansion plans. Meanwhile, Risen Energy Co has scaled down production since last year, as JA Solar Technology Co halted production back in 2023.
Global oversupply persists
Following the tariffs, there "might be some leftover supply", considering Asean’s status as a major supplier of solar panels to the US, said Chong, who is also CEO of Main Market-listed solar farm developer and installer Solarvest Holdings Bhd (KL:SLVEST).
Meanwhile, Samaiden Group Bhd (KL:SAMAIDEN) managing director Chow Pui Hee said fire sales by local manufacturers are unlikely — unless it’s for stock clearance ahead of a factory shutdown.
“Unless they (local manufacturers) can reduce prices to match those of imports from China, it’ll be difficult to sell locally,” Chow added.
The majority, if not all local installers, source solar panels from China. Both Solarvest and Samaiden see no impact on their earnings from the latest tariff episode.
In a note, TA Securities said it anticipates "mild impact" from short-term overcapacity as global panel prices are already close to the floor.
"We anticipate a largely neutral impact on listed local solar players," TA said.
MPIA's Chong foresees solar PV price to "continue to be low at below US$0.10" per watt as global oversupply persists, benefitting local installers and solar farm developers.
On the Malaysian economy, the extent of the impact remains to be seen. The RM12.5 billion solar PV export figure in 2024 represents 2.08% of Malaysia’s total RM601.2 billion in electrical and electronics exports last year, although a number of manufacturers were enjoying tax holidays as investment incentives.
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