The PV manufacturing equipment market for is predicted to more than halve next year according to a firm of solar industry analysts.

IMS Research says in its study published today that this year’s record global revenues of $12.8bn will fall to just over $5.7bn in 2012.

Driving the dramatic drop will be decreases in the new manufacturing capacity required and limited demand for upgrades or replacements of existing capacity.

IMS states that in recent years PV manufacturers have invested heavily in new equipment and additional capacity in a bid to increase their market share and establish themselves as a credible volume supplier. “Whilst this has fueled the recent boom in the PV equipment market, it has also caused the significant over-capacity for device manufacture that now exists,” the study concludes.

IMS Senior research analyst Tim Dawson said: “Massive over-capacity, coupled with a reduction in demand, has led manufacturers either to postpone or, where possible, cancel orders for new manufacturing equipment, at least in the short term.”

He added: “Longer term, although a return to growth is inevitable for 2013, a strong recovery has not been forecast. The PV manufacturing equipment market will instead steadily recover, as companies look to invest once again in new equipment to remain competitive, improve their production processes, increase cell efficiencies, and reduce the cost per watt associated with the ultimate end product.”