In a worst case scenario that Taiwanese solar cell producers are hit with high anti-dumping duties as part of the US investigation, Mexico and Malaysia are expected to be the most attractive destinations for companies to manufacture products destined for the US market, according to market research firm TrendForce.

Having undertaken fresh analysis of the US anti-dumping implications after China-based PV producers were hit with a second round of duties last week, reliance on Taiwanese cells in particular to avoid duties could end if duties are high.

Although TrendForce said that Taiwanese producers were not expecting high duties, PV manufacturers wanting to retain and grow business in the US could consider locating production in Mexico, Malaysia and Indonesia.

However, companies could also be considering outsourcing module production to third-party manufacturers with existing facilities in places such as Mexico. Companies such as ReneSola have already secured module assembly capacity of over 1.1GW in key markets such as Europe and Japan.

SunEdison, which currently outsources all of its cell and module production, could use facilities owned by OEM partners such as Flextronics in countries such as Mexico and Canada to meet its PV project pipeline in North America.

TrendForce noted that the solar cells ‘country of origin’ was the critical aspect for Chinese PV module manufacturer’s strategies to avoid duties.

They could switch cell sourcing to other producers in Southeast Asian and Korea but PV Tech discovered during Intersolar Europe that cell capacity and therefore availability was limited, regardless of the higher purchasing costs.

Although Chinese companies were hesitant to detail possible plans, Malaysia’s relatively large and established supply chain and limited higher costs could be the most attractive destination for keeping cell and module production in-house while servicing the US market.

Capital expenditure could also be kept to a minimum by relocating older cell manufacturing lines from China to Malaysia, freeing-up space for new lines in the next major capacity expansion phase.

The biggest impact, according to TrendForce could rest on Taiwanese producers should duties be high, noting that orders would be lost, without relocating production.

Companies such as REC Solar and Hanwha QCELLS could benefit from the shift in end customers dropping the use Chinese modules, though such companies would have to further expand capacity in Singapore and Malaysia respectively to meet potential demand.