The solar industry's upstream auxiliary material suppliers are now daring to stand up to their major customers, while module manufacturers would rather forfeit bids than accept loss-making orders, with "cash is king" replacing "market share is king."

Meanwhile, cross-industry expansion into energy storage and semiconductors has become a trend, reflecting the industry's deep-seated anxiety.

Some leading companies have already seen their cash flow turn positive ahead of others, but the clearing of excess capacity is far from over, and the bottoming-out process will continue.

Analysts argue this is not a true surrender but rather an extreme self-rescue forced by market mechanisms. The solar industry is enduring a long and harsh winter, with supply-side oversupply, shrinking demand, widespread net losses, persistently tight cash flow, and a cold shoulder from capital markets, making short-term profit improvement hard to anticipate and long-term direction unclear.

Solar companies have begun to "pull back" in various ways.

Exercising Caution on Orders

Recently, upstream auxiliary material companies specializing in silver paste, glass, and encapsulant film have become noticeably more cautious about taking orders, raising their requirements on pricing and payment collection, even when dealing with major downstream customers.

Juyou Materials is restraining itself from low-priced, long-payment-cycle orders, prioritizing profitability and cash safety rather than purely pursuing shipment volume.

Dike Co Ltd is strengthening payment collection management, optimizing customer settlement methods, prudently evaluating low-priced orders, tightening credit terms for customers with weaker credit profiles, and refusing to take on large low-priced orders that erode cash flow.

Flat Glass Group is no longer accepting low-priced orders without limits, prioritizing customers with strong financial capacity, and adopting a conservative strategy of selective delivery for scattered small orders and heavily discounted orders.

First Applied Material is maintaining a prudent approach to orders where quotes cannot cover costs and customer payment collection is poor.

Rumors even suggest that major downstream customers are now "begging" upstream suppliers to take orders, with the buyer-seller dynamic completely reversed. The once-revered myth of the "big customer" no longer exists, and upstream suppliers are no longer willing to sacrifice everything for orders, especially payment terms. "Cash is king" has finally trumped "market share is king," and survival takes priority over expansion.

This confidence is well-founded. After this round of cyclical consolidation, the competitive landscape in the upstream auxiliary materials segment has stabilized. Only a handful of companies remain capable and willing to take orders, giving upstream players leverage to negotiate with major downstream customers. This may be the beauty of market-driven reshuffling.

This trend extends beyond upstream auxiliary materials to downstream modules as well.

Canadian Solar has explicitly stated it adheres to a profit-first approach, optimizing sales strategies, shipment structures, and market positioning, focusing on high-value regions and strategic customers. As a result, Canadian Solar's module shipments have dropped from a global top-five ranking to outside the global top ten.

Other leading module manufacturers are also becoming more cautious about taking orders. In 2026, multiple solar projects have seen winning bidders abandon contract signings after winning bids, with module manufacturers preferring to give up bidding qualifications rather than accept low-priced orders, choosing not to do business rather than lose more with every deal. Staying at the table matters more than being washed out.

Now that the solar industry is frozen out of capital markets, solar companies no longer need to do superficial things to cater to investors. Cash flow is king and everything else is meaningless. A consensus has formed: maintain operations at minimum production scale, sustain basic survival and development, endure the winter, and then make plans.

Overcapacity in the solar industry persists, and financial depreciation pressure remains significant. However, driven by cash flow requirements, some leading companies have seen their cash flow turn positive despite operating losses. Trina Solar recorded net operating cash flow of 5.1 billion yuan in the first half of 2026, JinkoSolar posted net operating cash flow of 1.5 billion yuan in the second quarter, and Tongwei Co Ltd reported net operating cash flow of 2.8 billion yuan in the second quarter.

This is precisely the correct path for a cyclical turnaround: cash flow must turn positive before profits can follow, though it takes time and patience.

Venturing Into Unrelated Fields

With the solar industry itself weak and shunned by capital markets, cross-industry expansion has become a trend as companies seek a second growth engine.

Energy storage is almost an inevitable choice for downstream application players such as module and inverter manufacturers. Sungrow Power Supply and Canadian Solar have already developed their energy storage businesses into either their largest main business or largest profit source, making it hard to tell whether they are solar companies or energy storage companies.

Sungrow and Canadian Solar are special cases. They began laying out their energy storage businesses over a decade ago, which is why they have achieved what they have today. For solar companies that entered the energy storage field later, the competitive pressure from being latecomers is much greater, and their growth momentum is far weaker.

Semiconductors are a field more favored by upstream material or equipment companies. Juyou Materials entered the semiconductor photomask segment through acquisitions, while LAPLACE Renewable Energy Technology is aggressively expanding into semiconductor equipment.

The cross-industry trend is written all over solar companies' anxiety. This anxiety reflects not only concerns about the solar industry's future growth space and competitive landscape but also a passive response to capital markets "abandoning" the solar sector.

A company's resources and energy are limited. When a solar company ventures into other fields, its development in the original solar business will be more or less affected, especially in terms of technological iteration, ultimately forming a negative feedback loop. Truly frustrating.

The Result of Market-Driven Forces

Over the past few years, the solar industry has been clamoring about "anti-involution." The results have been minimal. Administrative intervention and industry self-discipline can hardly change companies' real-world decisions or balance the vital interests of stakeholders, as the saying goes: no rabbit, no hawk.

Only market-driven forces can serve as the greatest driving force. On the surface, cautious order-taking, scale contraction, and cross-border breakthroughs look like a collective industry "pullback." But peel back the layers, and this is each company's "wintering strategy" developed amid the harsh cold. No longer sacrificing everything for market share, controlling losses, safeguarding cash flow, and waiting for inefficient capacity to be gradually cleared out.

Of course, this process is destined to be painful. Some companies will be unable to withstand the cyclical pressure and exit the market. Only when excess capacity is truly cleared and supply-demand dynamics are rebalanced can the players remaining at the table truly welcome the dawn of the industry's spring.

However, we must also remain clear-headed: positive cash flow does not equal a cyclical reversal, and cross-industry expansion does not equal overtaking on a curve. Capacity clearing will not happen overnight, and the solar industry's bottoming-out process will continue for a considerable period.

Therefore, what appears to be a collective "pullback" by solar companies is more like a collective redemption in the industry's harsh winter. Everyone is searching for their own "wintering strategy," and after outlasting some competitors and achieving capacity clearing, those still at the table will naturally welcome the dawn of spring.