Perhaps the latest development should not take us by surprise. Following the arrest and potential extradition of its chief financial officer, a U.S. federal government ban on the company’s import of key components, tariffs on Chinese-made inverters and 11 senators asking the federal government to ban Huawei inverters (on rather sketchy factual grounds), perhaps we should have seen this coming.
Yesterday Roth Capital Partners issued a note stating that Huawei has pulled out of the U.S. inverter market, laying off all of its U.S. citizen staff and transferring non-citizen staff out of the United States. Roth additionally says that it believes that Huawei has laid off 80% of its Enterprise Business staff.
We were not able to confirm this news using other sources by press time, however Cormac Gilligan, research manager for solar and storage at IHS Markit, has noted that the LinkedIn profiles of most of the company’s U.S. staff indicate that they have left the company.
While Huawei is one of the largest global makers of inverters, the majority of its presence has been outside the United States. Figures from Wood Mackenzie Power & Renewables quoted by Greentech Media show Huawei as the world’s largest inverter maker with 22% of the global market in 2018, but only 4% of the U.S. market – although it has a larger share of the three-phase inverter market in the United States.
Regardless this will mean that Huawei will miss out on substantial opportunities. The U.S. utility-scale market is beginning to boom, particularly in Florida, Texas and the U.S. Midwest, with the scheduled drop-down of the U.S. Investment Tax Credit (ITC) pushing developers and off-takers to get projects online within the next few years.
Roth Capital states that Huawei’s departure will be a positive for SolarEdge, and this could also open space for Sungrow, SMA and other companies which it competes with in the commercial and utility-scale markets.
However, it is unlikely that this will be the last of the trade war between the United States and China, with tariffs pending on both lithium-ion batteries and chemicals for producing these batteries – to add to the tariffs on solar cells and modules, inverters and components made in China.