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

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Source: Securities Market Weekly

Text | Shang Yang

Dragged down by external markets, China’s A-share market continued to decline on Monday. Rumors circulated that “risk capital sold off fixed income + triggering chain reactions of selling, public funds were forced to sell stocks, convertible bonds, and ETFs,” which is considered the main reason for the decline.

However, boosted by news that Tesla is planning to purchase photovoltaic manufacturing equipment worth about $2.9 billion from Chinese suppliers, the photovoltaic equipment sector has recently outperformed the overall market. Senior market analyst Peng Zu believes that Tesla’s massive purchase has a multi-dimensional and far-reaching impact on China’s photovoltaic equipment sector. It not only boosts sector sentiment in the short term but also promotes 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. Tesla will collaborate with SpaceX and xAI to build the largest chip manufacturing plant in history, aiming to produce 100 to 200 billion advanced 2-nanometer chips annually.

SpaceX founder and Tesla CEO Elon Musk stated that Terafab’s goal 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 must be transferred to space.

Recently, reports indicated that Tesla plans to purchase photovoltaic manufacturing equipment worth approximately $2.9 billion (close to 20 billion RMB) from Chinese suppliers for its solar panel and battery manufacturing project in Texas, USA. Some of the equipment’s output capacity will also power SpaceX satellites. Once the news broke, it quickly boosted the stock prices of related listed companies in China’s photovoltaic equipment sector.

On March 20, the photovoltaic equipment concept in China’s A-share market surged against the trend, with Mawei Co., Jiejia Weichuang, and Laplace rising significantly. 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 chart), and companies like Yicheng New Energy and GCL Integration also performed well.

It is reported that Tesla’s team has entered substantive negotiations with multiple Chinese photovoltaic equipment companies, with some core enterprises applying for export licenses from the Ministry of Commerce, and relevant approval processes are progressing in an orderly manner.

Peng Zu, the speaker of “Decoding Industry Leaders,” believes that Tesla’s massive procurement has a multi-dimensional and profound impact on China’s photovoltaic equipment sector. It not only boosts sector sentiment in the short term but also promotes high-quality industry development in the long term. In the short term, the $2.9 billion order directly brings 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 choices highly recognize China’s photovoltaic equipment technology strength, further enhancing China’s PV equipment recognition in the global market, accelerating high-end equipment exports, and transforming the industry from “component exports” to a full chain of “high-end equipment + core materials.”

Candidate companies speculation

Although Tesla, the Ministry of Commerce, and related companies have not made official responses, the market generally considers Mawei Co., Jiejia Weichuang, Laplace, and others as core candidates in this procurement.

Mawei Co., as the world’s largest solar cell screen printing equipment supplier, has maintained the top global market share from 2016 to 2024, with over 70% market share in HJT (heterojunction) full-line equipment. Its HJT technology can meet both ground PV and space PV needs, 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 PV equipment suppliers covering TOPCon (tunneling oxide passivated contact), HJT, and perovskite full lines, and the only supplier capable of turnkey TOPCon line projects. Its TOPCon equipment market share is industry-leading and highly matches Tesla’s 100 GW ground PV capacity construction needs.

Laplace, a leader in high-efficiency solar cell equipment, focuses on high-performance thermal processing, coating, and automation equipment for PV 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 in large-scale ground PV production.

In addition to these core candidates, several other A-share companies are considered potential suppliers and may share in this massive order (see appendix).

Valuation and performance double uplift for leading companies

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

CITIC Securities believes space PV demand may see exponential growth. Musk’s investment in PV manufacturing paves the way for orbital computing power and AI power supply. Top Chinese PV equipment manufacturers with strong R&D and rapid response capabilities are expected to join Tesla and SpaceX’s supply chain and secure high-value orders, opening new growth opportunities. Additionally, space PV equipment may have obvious inflation 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 with AI giants competing fiercely, “computing power to space” has become a consensus. Under this trend, space PV, as a major energy supply form, is expected to benefit deeply, with an estimated market space reaching hundreds of billions of yuan in the future. This new narrative opens up additional growth space for the PV industry.

Guojin Securities notes that when the combined cost of power platforms, launch costs, and space cabinets for computing satellites is less than or equal to the manufacturing premium of ground cabinets, space computing power becomes cost-effective. Current prolonged connection times for North American data centers’ power grids (up to 5 years or more) make space data centers more feasible, quickly boosting global AI computing power and downstream applications, thus expanding demand for space PV. For investment opportunities in commercial spaceflight and space computing, three key directions are recommended: 1. overall satellite manufacturing; 2. space PV equipment and cell suppliers; 3. specialized packaging materials for space environments.

(Note: The stocks mentioned are for illustrative analysis only and are not investment recommendations.)