A 200-billion-yuan mega-order ignites the market! The sector ushers in a trillion-yuan market opportunity!

Ask AI · How can the space photovoltaic market help promote AI computing power development?

Text | Shang Yang

‍ Due to external market pressures, the A-share market continued to decline on Monday, with rumors circulating that “risk capital sold off fixed income + triggered chain reactions of selling, public funds were forced to sell stocks, convertible bonds, and ETFs,” which is considered the main reason for the decline of the A-share market.

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However, benefiting from the news that Tesla is planning to purchase approximately $2.9 billion worth of photovoltaic manufacturing equipment from Chinese suppliers, recently, the concept of photovoltaic equipment has performed significantly better than the overall market, senior market analyst Peng Zu believes that Tesla’s massive purchase this time has a multi-dimensional and far-reaching impact on China’s photovoltaic equipment sector, not only boosting sector sentiment in the short term but also promoting high-quality industry development in the long term.

Elon Musk’s 20 Billion Yuan Order Ignites Photovoltaic Stocks

On the evening of March 21, Eastern Time, SpaceX and Tesla jointly announced the Terafab project, where Tesla will collaborate with SpaceX and xAI to build the largest chip manufacturing plant in history, aiming to produce 100 billion to 200 billion advanced 2-nanometer chips annually.

SpaceX founder and Tesla CEO Elon Musk said that the goal of Terafab is to produce over 1 terawatt of computing power annually, with about 80% used for space and about 20% for ground applications. Since the US’s annual power generation is only 0.5 terawatts, most future computing capacity will need to be transferred to space.

Recently, there have been reports that Tesla is planning to purchase about $2.9 billion (close to 200 billion RMB) worth of photovoltaic manufacturing equipment from Chinese suppliers, for its solar panel and battery manufacturing project in Texas, USA. Some of the equipment’s output capacity will also supply power to SpaceX satellites. Once the news broke, it quickly triggered a rally in the stock prices of related listed companies in China’s photovoltaic equipment sector.

On March 20, the A-share photovoltaic equipment concept sector surged against the trend, with Maiwei Co., Jiejia Weichuang, and Laplace leading the gains. On March 23, although the overall market continued to retreat, the photovoltaic equipment index performed notably better, with Huamin Co. hitting a “20CM” daily limit (see attached chart), and companies like Yicheng Xinneng and GCL Integration also performed well.

It is understood that Tesla’s team has entered substantive negotiations with multiple Chinese photovoltaic equipment companies, and some core enterprises have applied for export licenses from the Ministry of Commerce of China, with the approval process progressing smoothly.

Peng Zu, the speaker of “Decoding Industry Leaders,” believes that Tesla’s massive procurement this time has a multi-dimensional and profound impact on China’s photovoltaic equipment sector, not only boosting sector sentiment in the short term but also promoting high-quality industry development in the long term. In the short term, the $2.9 billion order directly brings clear performance growth to related equipment companies, alleviating previous industry overcompetition expectations and driving valuation recovery; in the medium to long term, as a global tech giant, Tesla’s procurement choice is a high recognition of China’s photovoltaic equipment technology strength, further enhancing China’s photovoltaic equipment’s recognition in the global market, accelerating the export of high-end equipment, and promoting industry transformation from “component export” to “high-end equipment + core materials” full-chain export.

Candidate Companies Speculation

Although Tesla, the Ministry of Commerce of China, and related companies have not made official responses to this news, the market generally believes that companies such as Maiwei Co., Jiejia Weichuang, and Laplace are core candidates for Tesla’s procurement.

Maiwei Co., as the world’s largest solar cell screen printing equipment supplier, has maintained the top global market share for solar cell screen printing lines from 2016 to 2024, with over 70% global market share for HJT (heterojunction) full-line equipment. The company’s HJT technology can simultaneously meet ground photovoltaic and space photovoltaic needs, capable of satisfying Tesla’s high-efficiency cost reduction for large-scale ground PV production and SpaceX’s satellite solar wing requirements for ultra-thin silicon wafers and high radiation resistance standards.

Jiejia Weichuang is one of the few global photovoltaic equipment suppliers that covers TOPCon (tunneling oxide passivated contact), HJT, and perovskite full lines, and is currently the only supplier with turnkey TOPCon full-line project capability, with a leading market share in TOPCon equipment, highly matching Tesla’s 100 GW ground PV capacity construction needs.

Laplace, as a leader in high-efficiency cell equipment, mainly focuses on high-performance thermal processing, coating, and supporting automation equipment for photovoltaic cell manufacturing. Its LPCVD (low-pressure chemical vapor deposition) equipment has over 60% market share, with semiconductor-grade precision, capable of meeting the extreme environment requirements of space PV cells such as radiation resistance and high-temperature endurance. Its automation equipment can also reduce costs for large-scale ground PV production.

In addition, besides the above core candidate companies, many other A-share companies are considered potential suppliers and may share this huge order (see attached table).

Valuation and Performance Double Boost for Leading Companies

Regarding the future trend of the photovoltaic equipment sector, some institutions believe that this order, combined with the industry’s turning point, may lead to sustained market performance. Currently, in March, the production scheduling of PV modules increased by 26%-29% month-on-month, silicon material and cell prices stabilized, domestic distributed PV policies relaxed, and industry profitability is recovering rapidly. Coupled with capital crowding effects, core leading companies in the PV equipment sector are expected to see valuation and performance double growth.

CITIC Securities believes that space photovoltaic demand may see exponential growth. Musk’s investment in photovoltaic manufacturing paves the way for orbital computing power and AI power supply. Top Chinese PV equipment manufacturers with strong rapid iteration and response capabilities are expected to join the supply chain for Tesla and SpaceX, securing high-value orders and opening new growth space. Moreover, space PV equipment may have obvious inflationary effects, with value potentially experiencing leapfrog growth. It is recommended to focus on leading manufacturers with technological, product, and market share advantages across the PV industry chain.

GF Securities states that AI giants are competing fiercely, and “computing power going to the sky” has become a consensus. Under this trend, space PV as a main energy supply is expected to benefit deeply, with an estimated future market space of trillions of RMB for PV equipment. This new narrative opens up new growth expectations for the PV industry.

Guojin Securities states that when the combined cost of power platform + launch costs + space cabinet is less than or equal to the ground cabinet’s manufacturing premium, space computing power will have cost-effectiveness advantages. Calculations show this goal is fully achievable. Considering that the current North American ground data center grid connection cycle has extended to 5 years or more, deploying space data centers will be smoother and faster, promoting global AI computing power growth and downstream application development, thus bringing broader demand scenarios for the space photovoltaic market. Regarding investment opportunities in space PV segments driven by commercial spaceflight acceleration and space computing power planning, three key directions are recommended: 1. Overall satellite manufacturing; 2. Space PV equipment and cell suppliers; 3. Space environment-specific packaging materials suppliers.

(The stocks mentioned in the article are for illustrative analysis only and do not constitute buy or sell recommendations.)