CSC has released a research report stating that recent price increases in polysilicon and silver have intensified profit pressures on photovoltaic cell and module manufacturers. A supply-demand gap for silver has persisted since 2019 and continues today. Considering the rigidity of silver supply alongside the sequential growth of emerging applications requiring silver, a long-term tight balance in silver supply and demand is anticipated. To control costs, reducing silver consumption has become an urgent priority for PV cell and module companies. Copper is the most ideal substitute material, requiring only the resolution of its susceptibility to oxidation and diffusion; the PCB, MLCC, and semiconductor industries already possess extensive experience that the PV sector can reference. Currently, silver-coated copper and electroplated copper solutions are progressing relatively quickly in the PV industry, while pure copper paste is the ultimate goal but still faces numerous challenges. The main viewpoints of CSC are as follows.
Silver is currently primarily used for PV cell electrodes. Due to the recent sustained rise in silver prices, the proportion of silver paste in module costs has now reached 19.3%, making it the largest cost component. A silver supply-demand gap emerged in 2019 and has persisted. Given the rigidity on the supply side and sequential growth in emerging applications, a long-term tight balance in silver supply and demand is expected.
On the supply side: Mineral production lacks elasticity, and recycling growth is limited. Silver supply mainly comes from mining (over 80% share) and recycling. Mining output is predominantly a by-product of copper/lead/zinc/gold mining (72% share); lead-tin ores have higher silver grades, but their output has declined over the past decade due to multiple factors. Independent silver mines (28% share) face issues of declining grades in existing mines and significant uncertainties in discovering new ones. Although recycling volume has increased, supported by growth in industrial silver-containing waste and improved recycling technologies, its elasticity remains limited.
On the demand side: PV demand shows resilience, while AI computing power and automotive electronics also exhibit growing silver demand trends. By 2024, PV accounted for 17.6% of silver demand, already significantly impacting the silver supply-demand balance. Although short-term PV installations face growth slowdowns due to grid integration bottlenecks, these constraints are expected to gradually ease with increased energy storage deployment and grid flexibility upgrades, ultimately putting PV back on a long-term growth trajectory.
Simultaneous price increases for polysilicon and silver are exacerbating cost pressures on modules, making silver consumption reduction an urgent priority. Since 2024, severe oversupply in the PV industry has led to losses across the entire supply chain. The recent price hikes for polysilicon and silver are further worsening the profitability pressures on PV cell and module manufacturers. As polysilicon is the only material in modules that cannot be substituted, and the industry already minimized silicon consumption during the previous polysilicon price surge, coupled with silver now being the largest module cost, cell and module manufacturers are compelled to accelerate efforts to reduce silver usage.
Copper is the most ideal substitute for silver, but its tendencies to oxidize and diffuse must be addressed. The PCB, MLCC, and semiconductor industries offer rich experience here. For oxidation, the PCB industry uses masking methods, applying an organic solderability preservative (OSP) film or precious metals (Electroless Nickel Immersion Gold - ENIG) to cover the copper. The MLCC industry employs atmosphere control, sintering in a nitrogen-hydrogen environment. For diffusion, the semiconductor industry uses barrier layers, depositing a layer (e.g., tantalum/tantalum nitride) onto wafer trenches before electroplating copper to prevent copper diffusion into the silicon.
Leveraging these concepts, the PV industry is currently promoting copper adoption primarily through three methods: silver-coated copper, electroplated copper, and pure copper paste. Silver-coated copper and electroplated copper are progressing relatively faster. Silver-coated copper involves lower capital expenditure pressure and could scale rapidly if successfully validated. Pure copper paste is the ultimate goal but still faces many challenges.
Silver-coated copper: Similar to the PCB industry's ENIG approach, this method uses a dense silver shell to coat copper powder, providing oxidation resistance and diffusion prevention. Low-temperature silver-coated copper was first validated on HJT cells, primarily because HJT cells have the strongest cost-reduction imperative for silver paste, and their low-temperature process, combined with the dense TCO film, helps mitigate copper oxidation and diffusion risks. Results show smooth progress in adopting silver-coated copper paste for HJT; using paste with 30%-50% silver content can reduce HJT cell metallization costs by approximately 0.15 RMB/W. High-temperature silver-coated copper + silver seed layer: TOPCon cells, using high-temperature air sintering, face greater risks of copper oxidation and diffusion. However, DKEM proposed a "double printing + double sintering" method enabling TOPCon to use silver-coated copper paste. This involves first printing a very thin silver seed layer using a high-temperature process, then overprinting a conventional silver-coated copper grid line (similar to HJT) using a low-temperature process (~300°C), avoiding damage to the silver-coated copper powder from high heat. The additional sintering step can utilize idle furnaces, minimizing new capital expenditure. A leading TOPCon manufacturer is already undertaking GW-level production line modifications with this scheme, showing relatively fast progress. At current silver prices, using it only on the TOPCon cell rear side can reduce metallization costs by about 0.045 RMB/W.
Electroplated copper: This resembles a lower-precision version of semiconductor processes. It involves placing a mask on the silicon wafer, removing the mask from grid line positions via exposure/development or laser etching, depositing a seed layer via PVD, electroplating copper onto the seed layer in an electrolyte bath, and finally plating a tin/silver layer on the copper surface as an anti-oxidation protective layer. BC cell leader Aiko is making relatively fast progress towards mass production, with its Jinan base already fully utilizing the technology. The main challenge remains the high capital expenditure (100-200 million RMB/GW).
Copper paste: This is still in the R&D phase. Approaches for atmosphere handling during high-temperature sintering are divided into local reducing atmosphere (compatible with existing air sintering) and fully reducing atmosphere (requiring new sintering furnaces). Local reducing atmosphere: Jolywood, in collaboration with Israel's Copprint, developed an anti-oxidation nano-copper powder that sinters at 300°C. During sintering, the anti-oxidation layer on the powder decomposes, releasing reducing gases to isolate it from air, enabling air sintering. Samples are currently being tested by leading cell and module manufacturers, with joint development ongoing. Fully reducing atmosphere: Emulating MLCC sintering, this process sinters in a reducing atmosphere of nitrogen and hydrogen but entails significant capital expenditure, including new sintering furnaces (3-4 times the cost of current PV furnaces) and consumables (muffles for sealing, nitrogen, hydrogen). However, tolerance for added capex is increasing as silver prices rise. This route is primarily being co-developed by leading metal powder supplier B&C with top PV manufacturers.
Investment recommendations: Rapid penetration of silver-coated copper and copper paste will bring significant profit elasticity to paste and metal powder companies. Assuming penetration rates for silver-coated copper and copper paste reach 17.7% and 43% respectively in 2026-2027, with cell production of 600GW and 700GW, the corresponding demand for silver-coated copper paste and copper paste would be 813 tons and 2188 tons. For paste companies: Current net profit per kg for PV silver paste is 100-200 RMB. Considering the increased process complexity of silver-coated copper and copper pastes, profit per kg is expected to be over twice that of silver paste, assumed at 300 RMB/kg. This corresponds to profit potentials of 320 million RMB and 730 million RMB for silver-coated copper and copper pastes in 2026-2027. Jolywood and DKEM reported net profits of 239 million RMB and 29 million RMB respectively for Q1-Q3 2025, indicating significant earnings elasticity from the adoption of these new pastes. For metal powder companies: B&C shipped approximately 150 tons of combined silver-coated copper powder and copper powder in 2024. The scaling of these pastes will provide substantial shipment and earnings elasticity.
Recommendations focus on: (1) PV paste companies: DKEM, Jolywood. Even if the metal powder switches from silver to silver-coated copper/pure copper, the final product remains a paste, where formulation and on-site debugging are core competencies. This is especially true as current silver-coated copper/pure copper pastes use silver seed layers for sintering and barrier purposes, requiring deep understanding of glass frit formulations from silver paste companies. (2) Metal powder company: B&C New Materials. The company develops its own equipment and processes, leads globally in 80nm nickel powder used for server AI chip capacitors (MLCC), secured a nearly 5 billion RMB order from a major international client, and is the sole supplier in the PV copper powder field, possessing strong global competitiveness with vast growth potential in AI and PV copper powder. (3) Downstream companies achieving rapid metallization cost reduction: Aiko, LONGi Green Energy Technology, leading TOPCon manufacturers. Most PV cell and module makers currently face the dilemma of rising polysilicon and silver prices coupled with difficulty passing costs downstream. Those achieving cost reduction through low-silver or silver-free technologies will gain significant cost advantages.
Risk warnings: 1. Risk of falling silver prices reducing the cost-effectiveness of copper substitution; 2. Risk of technology diffusion exceeding expectations; 3. Risk of PV demand falling short of expectations.
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