The US ITC launched 337 investigations, Jinko and Longi are on the list

Date: 2019-04-09 11:02:28

 

 

According to reports, the United States International Trade Commission (ITC) voted to launch the 337 investigations on specific photovoltaic cells and their downstream products (survey code: 337-TA-1151). It is understood that the US ITC launched the 337 survey mainly in response to the request of Korean photovoltaic company Hanwha New Energy. On March 4, Hanwha New Energy, who considered that its patent rights had been infringed (US registered patent No. 9893215), filed 337 application for investigation with ITC of the United States, requesting ITC of the United States to issue a limited exclusion order and prohibition order.

China’s photovoltaic giants Jinko and Longi are the main objects of this patent infringement complaints by Hanwha.

 

Behind the disputes

In early March, Hanwha New Energy launched suits in the United States, Germany and Australia against Chinese photovoltaic module manufacturers Jinko and Longi for "patent infringement", claiming that the two competitors used their patented solar cell passivation technology to improve product performance.

The passivation technology refers to the most popular PERC technology in the current market. Since its emergence in the leader project in 2015, PERC cells and various efficient modules based on PERC cells have become the darlings of the market. According to statistics, the global production capacity of PERC cells has reached about 80 GW. It is predicted by the experts that PERC cell capacity may reach 100 GW in 2019. The popularity of PERC products attracts most enterprises to compete for layout, among which Jinko and Longi are the leaders. In terms of efficiency, in recent years, Jinko and Longi have continuously updated the conversion efficiency of PERC cells, and have been leading the world. In terms of production capacity, both Jinko and Longi have about 4 GW PERC cell capacity.

Now that PERC has become a trend, Jinko Energy and Longi are the most competitive enterprises in the field of PERC products. Such a strong competitiveness may make other peer enterprises feel pressure, so that Hanwha New Energy hopes to obtain market share through patent infringement complaints.

It is understood that under the influence of the "531" policy last year, the domestic market has shrunk, and photovoltaic enterprises in China have begun to accelerate the expansion of overseas markets, including, of course, large enterprises such as Jinko and Longi. Longi's overseas business has accounted for more than 50% of its global business, while Jinko’s overseas business accounted for 70% before 531.

As the most mature market in the world, the European and American markets is are quintessential for the major photovoltaic enterprises to compete. Recently, Hanwha New Energy has built a 1.7GW module factory in the United States, aiming to open up the U.S. market. This also means that Hanwha New Energy will face the competition of Chinese photovoltaic enterprises in the European and American markets.

If Hanwha New Energy succeeds in lawsuits in the United States, Germany and Australia, the products of the alleged company will be prohibited from being sold in the appellate countries and regions. Because of the strong competition in the European and American markets, Hanwha New Energy will be able to directly attack its competitors and gain better market space.

 

337 Survey will have a negative impact

In the face of patented infringement complaints, Jinko Energy and Longji expressed their opposition for the first time. Jinko Energy believes that these lawsuits lack technical or legal basis. Longi said that Longi products and patents involved in the technical methods are not the same (Korean patent uses ALD technology, whilst Longi uses PECVD technology).

Generally speaking, Jinko Energy and Longi deny patent infringement, and Longi even questioned the so-called "patent right" of Hanwha New Energy.

Nevertheless, the US ITC 337 investigation still arrived as scheduled, and Jinko and Longi, which are at the center of the infringement storm, will bear the brunt of the negative impact.

First of all, if the US ITC 337 investigation found that there were infringements on Jinko and Longi, the products of the two Chinese companies would be banned from entering the United States. This is the worst result for the two Chinese photovoltaic companies. It is worth mentioning that not only these two photovoltaic companies, but if the 337 survey eventually adopted a general exclusion order, with no distinction of the source, it will be prohibited for such products to enter the United States. This will affect the whole category of PERC products, and affect all Chinese photovoltaic enterprises with PERC capacity.

It is particularly worrying that China has always been the biggest victim of the 337 investigation in the United States. In relevant cases that have been adjudicated, the failure rate of Chinese enterprises is as high as 60%, which is much higher than the world average of 26%.

These are the possible negative impacts of the 337 investigations, which will continue to have negative impacts even if the lawsuit against Hanwha New Energy fails in the course of the investigation.

It is understood that international patent litigation takes several years. Due to the existence of this lawsuit, European and American customers will have doubts when they buy Jinko and Longi products, because once the result of the lawsuit is not good, the customers who buy products may also have to bear joint and several liability and face the risk of claims from Hanwha New Energy.

As a result, as long as the 337 survey is started, both Jinko Energy and Longi shares will be adversely affected. From the above analysis, the lawsuit of Hanwha New Energy has achieved the purpose and effect of cracking down on competitors. On the other hand, it also proves the strength of photovoltaic enterprises in China.

How will Jinko and Longi respond to the investigations?