Breaking into Tongwei Co., Ltd.'s supply chain, how far is Haitan Co., Ltd. from becoming a "main supplier"?

Ask AI · How will Haitan Shares’ crossover into photovoltaic silver paste address funding and technological challenges?

Author: Sogear

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On March 23, 2026, Haitan Shares (603759.SH) announced that it had signed a strategic cooperation framework agreement with Tongwei Solar, a wholly owned subsidiary of Tongwei Co., Ltd. (600438.SH). The two parties will collaborate in new solar cell paste fields such as HJT, TOPCon, and perovskite.

Stimulated by this news, Haitan Shares’ stock price hit the daily limit after opening on March 24. Closing at 10.13 yuan per share, its total market value surged to 4.68B yuan.

That evening, Haitan Shares quickly issued a supplementary risk warning, clarifying that this agreement is only a framework and intention-based arrangement, not involving substantive details such as specific business scale or implementation timetable. The actual cooperation projects, amounts, and progress all require formal contracts to be signed separately by both parties. There is significant uncertainty whether the cooperation can be smoothly implemented.

A framework agreement that triggered a stock price surge was soon cooled down by a risk warning. How genuine is Haitan Shares’ partnership with Tongwei?

What is the substance of the framework agreement?

In Haitan Shares’ supplementary announcement on the evening of March 24, three key points stand out:

First, the nature of the agreement is “framework and intention-based”;

Second, it does not involve “specific business scale, implementation timetable, or other substantive content”;

Third, subsequent progress “requires both parties to sign formal contracts separately to confirm.”

In the photovoltaic industry, a framework agreement is a common way to express cooperation intent and establish a basis for future negotiations. For a global silicon wafer leader like Tongwei Solar, signing such a framework agreement with upstream material companies is mainly driven by strategic considerations such as supply chain security, exploring technical routes, and cultivating backup suppliers. Its binding force is relatively low.

The agreement mentions “prioritizing cooperation under equal commercial conditions,” which often also implies high implicit thresholds. Under “equal commercial conditions,” Haitan Shares’ products in the highly competitive photovoltaic silver paste track must at least match or surpass existing main suppliers in conversion efficiency, printing performance, curing conditions, aging reliability, and most critically, cost per watt. Until they can demonstrate product strength, the word “priority” remains unsubstantiated.

The agreement states “jointly promote the development of new photovoltaic pastes and share related intellectual property rights.” For Haitan Shares, this is an opportunity to leverage industry leaders to improve R&D; for Tongwei, it’s a low-cost way to explore new industry segments. Tongwei does not need to bear all R&D trial-and-error costs and can grasp the technological dynamics of new pastes. If Haitan’s R&D encounters obstacles, Tongwei can switch to other suppliers at any time, while Haitan may face sunk costs in R&D.

The most scrutinized part of the agreement is perovskite photovoltaic technology, which exemplifies such uncertainties. Perovskite is still in early industrialization, with key metrics like large-area module efficiency, stability, and yield continuously being optimized. Commercial applications of core materials like pastes are not yet fully mature, and technical routes still have uncertainties. Competition in technical routes is fierce, with high R&D costs and uncertain results.

Many broker research reports point out that competition in the photovoltaic paste industry is intensifying. Leading cell manufacturers take a long time to certify material suppliers, and new entrants need extended periods to verify large-scale supply capabilities. Haitan admits in its announcement that “at present, it does not have conditions to directly contribute to performance,” and moving from “backup” to “main supplier” for large-scale supply will require a lengthy validation process.

In other words, this framework agreement that caused the stock price surge is more like a “letter of intent” than a “purchase order” at the business level. It opens the door for Haitan to enter Tongwei’s supply chain, but whether it can succeed depends on Haitan’s ability to prove product strength, cost control, and delivery stability in subsequent steps. Until then, the words “priority procurement” remain on paper.

The “Triple Gate” for New Entrants

Haitan’s original main business was environmental water services. In April 2025, Haitan acquired 100% equity of Heli Group’s Heli Photovoltaic, 100% of Photovoltaic Technology, and HPSL, officially entering the photovoltaic paste sector.

Haitan’s entry coincides with the most intense period of competition in the photovoltaic paste industry.

According to the China Photovoltaic Industry Association, in 2024, the top five global photovoltaic conductive silver paste companies held over 75% of the market share. Domestically, a “duopoly” has formed between Dike (300842.SZ) and Juhua Materials (688503.SH). In 2025, after acquiring Zhejiang Sote, Dike’s market share rose to 33.4%, surpassing Juhua’s 27%. Although Juhua still led in sales revenue in the first three quarters of 2025, its competitive advantage is being eroded.

For new entrants in the photovoltaic silver paste track, there are traditionally “three gates”:

First gate: technological and patent barriers. Public info shows that in 2021, Juhua Materials faced nearly 200 million yuan in patent litigation from Zhejiang Sote during its IPO, ultimately settling with large compensation. In 2025, Zhejiang Sote successfully sued Guangda Electronics for 200 million yuan over patents, indirectly causing Fuda Alloy (603045.SH) to abort its acquisition plan.

Heli Photovoltaic holds 218 core patents related to photovoltaic silver paste, and through cross-licensing with Zhejiang Sote (formerly DuPont’s silver paste business, now a Dike subsidiary), Haitan shares 99 core patents.

But owning patents does not equal having products. The core competitiveness of photovoltaic silver paste ultimately depends on conversion efficiency, printing performance, curing conditions, aging reliability, and most critically, cost per watt. Heli was once a leading global silver paste company, but before acquisition, its market share declined, and its product competitiveness weakened relative to DuPont, Samsung SDI, and others. Haitan’s acquisition of Heli retained the original R&D team and promised increased investment, but whether Heli’s technology assets can be revitalized remains uncertain.

Second gate: market. Certification of paste suppliers by cell manufacturers is extremely cumbersome. From sample testing, small batch trials, mid-volume validation, to entering the main supplier list, the cycle often spans months or even years. Switching suppliers involves process adjustments, yield stability verification, and cost calculations—making customer stickiness very high once cooperation is established, and switching costs are substantial.

Haitan currently only has a “priority procurement” intention from Tongwei. Over-reliance on a single customer in the paste industry is risky. If Tongwei’s procurement pace slows or technical routes change, Haitan’s capacity utilization could face severe challenges.

Third gate: funding. Silver paste is a “money-consuming beast” industry. Silver powder accounts for over 90% of silver paste costs, and purchasing silver powder requires huge cash flow support. For a 3,000-ton annual capacity, at current silver prices (~8 million yuan per ton), raw material procurement alone needs about 24B yuan annually. Even at 50% capacity utilization, over 12B yuan in capital turnover is needed.

Haitan’s main business was environmental water services, with a relatively stable business model and limited cash flow. In 2024, Haitan’s revenue was about 1.5 billion yuan, with less than 1 billion yuan in cash and equivalents. The capital needed for large-scale silver paste production exceeds what its main business can support.

In contrast, Dike and Juhua have established mature capital turnover systems. They possess stronger cash reserves and utilize supply chain finance, bank credit, accounts receivable factoring, and other methods to maintain liquidity. Juhua even acquired Jiangsu Juyou Silver to achieve independent silver powder supply, further reducing dependence on upstream cash flow.

If Haitan wants to truly scale its silver paste business, it will face enormous capital pressure. Can Haitan afford sufficient financing? Will it consider refinancing or bringing in strategic investors? These questions are key market concerns.

Conclusion

Some broker analysts believe that “the future photovoltaic silver paste market will feature a ‘tripartite or even four-way’ competition pattern. Dike, Juhua, Haitan, and possibly new entrants will intensify competition. But this is good for downstream cell manufacturers, as diversified supply will strengthen bargaining power, promote cost reductions, and ultimately benefit the entire photovoltaic industry chain.”

The battle has begun, but the outcome remains uncertain. Whether Haitan can move from “priority procurement” to “main supplier,” and whether it can turn Heli’s technological legacy into real market competitiveness, still requires time to verify. But from the risk warning issued overnight, Haitan clearly recognizes the challenges ahead.