The latest quarterly report published by IMS Research has shown that the expansion of PV wafer, cell and module manufacturing capacity will slow dramatically throughout the rest of 2012 in response to slowing demand in key regions and a severe oversupply of PV products.

IMS Research estimates that by the end of 2011, 50GW of global PV module manufacturing capacity will be in place – an increase of over 54 percent since the start of the year, despite global demand only growing by 19 percent to 23GW.

Wafer, cell and module production capacity is now forecast to slow dramatically over uncertainty in major markets, such as the UK. The uncertainty, coupled with an oversupply of products throughout the supply chain, will result in an expansion of less than 10 percent in 2012.

The report reveals that, in addition to suppliers cutting back and delaying expansion plans, many of the largest suppliers are halting production altogether. Sam Wilkinson, report author and Senior Research Analyst at IMS Research, commented, “A number of manufacturers have recently announced suspended production or closure of production facilities.”

“With the supply of these products exceeding demand by such a margin, top-tier branded cells and wafers are available at incredibly low prices and many suppliers are favoring purchasing cells and wafers on the spot market over manufacturing them internally.”

IMS Research predicts that although global manufacturing capacity will increase over the coming quarters, it will be at a much slower rate than the industry has previously experienced, just six percent during the first half of 2012.