The US International Trade Commission recently announced it would extend the final decision of countervailing duties on solar photovoltaic (PV) imports from China and change the scope of the investigation to target modules and cells. However, a 2012 decision on Chinese cells prevails, so they will not be affected by the ITC’s recent amendment.

By contrast, duties will likely be slapped on Chinese modules, irrespective of where wafers or cells used in the modules are produced. Taiwan manufacturers, meanwhile, should expect for modules produced in Taiwan to be investigated as well as third-party module manufacturers who use Taiwan-made cells.

The ITC’s new amendment to the 2014 anti-dumping and countervailing duties simplified the criteria under which Chinese modules can be targeted, said Jason Huang, a research manager at EnergyTrend, a subsidiary of the Taiwan-based market intelligence firm TrendForce.

As a result, it is now easier for the US to block imports of Chinese modules. Originally, if Chinese modules used silicon wafers produced outside of China and cells produced in Taiwan, they could avoid the duties.

Huang said, “This new amendment is a game changer. Now if companies like Yinlgi, Suntech or Jinko choose to manufacture modules in China, they will produce cells themselves rather than using cells made in Taiwan. ”

“This will ensure the modules are only hit with the lighter 2012 duties rather than the new, higher one. This will cause market demand for Taiwan-produced cells to plummet.”

As a result of the amendment to the US’s anti-dumping and countervailing duties, Taiwan cell manufacturers will see a drop in orders from Chinese vendors. Meanwhile, Chinese silicon wafer manufacturers, who enjoy a cost advantage, will be unaffected. They will be able to keep prices down. But wafer manufacturers outside of China will be undercut by those low prices.

Most modules shipped to the United States sell for US$0.75~0.8/W and enjoy a reasonable profit margin. But if vendors choose a third-party destination to produce cells or modules, they can save $0.04~0.06/W and boost profits, Huang said.

“Developing production capacity outside of Taiwan or China will be instrumental for Taiwanese and Chinese solar firms to remain profitable in the future,” he added.