South Korea's Samsung SDI Co Ltd said it expects the global solar cell market to be worth $70 billion by 2020, more than double last year's $30 billion, with falling prices and government support expected to drive demand globally.
Choi Chang-sik, executive vice-president of the company's solar energy division, told Reuters in an interview that a growing aversion to nuclear power after the radiation crisis in Japan and rising oil prices would lift demand for solar energy.
But the solar cell market, weighed down by excess supply amid aggressive expansion by Chinese cell manufacturers and weak global demand, would continue to face overcapacity until 2013, said Choi.
"Overcapacity in the whole solar value chain will continue until 2013, and a separation of the wheat from the chaff is likely to come along," Choi said.
A brutal 2011 has left the solar industry damaged and on the cusp of a major shakeout of weaker players.
Solar subsidy cuts in top markets Italy and Germany prompted a 20 percent drop in the price of solar panels this year, bringing the fast-growing solar industry to a critical tipping point.
And news of bankruptcies at solar companies in the United States highlight difficulties in competing in a sector dominated by low-cost Chinese producers.
Despite a difficult market, Samsung SDI is unfazed, targeting to grow its solar cell production to 3 gigawatt by 2015 from about 150 megawatt now.
The company competes with some of the biggest solar producers such as China's Suntech Power Holdings and Trina Solar.
It also has ambitions of venturing into thin-film solar making by next year at the earliest, an industry which counts US-based First Solar Inc and Japan's Showa Shell Sekiyu KK's among its biggest suppliers.
"Our super-efficient crystalline solar cells will differentiate us from our competitors, while we build our portfolio in thin-film products," said Choi, a battery expert with an electrical engineering doctorate.
The company plans to initially market its solar products to the United States, Japan and Europe. It also has its eyes on emerging markets, including China and India.
Samsung SDI, considered a latecomer in the sector, plans to focus on organic growth, eyeing synergies with Samsung group affiliates. The company has no plans to acquire thin film solar assets, said Choi.
South Korea's cap-and-trade scheme or emission trade system, planned for launch after 2015, is expected to buoy demand for renewable energy including solar as consuming renewable energy will offset their carbon emission, Choi said.
Samsung SDI, which has the world's top memory chipmaker Samsung Electronics as its largest shareholder, had announced it will spend 2.2 trillion won in the solar business by 2015. Samsung Electronics has transferred its solar business to SDI earlier this year.
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