LONGi Green Energy Technology Co., Ltd. (601012.SS) concluded Friday's trading session on the Shanghai Stock Exchange with its A-shares advancing 0.7% to close at 18.36 yuan. The modest gain comes amid heightened investor scrutiny of intellectual property costs and a shifting demand landscape within China's solar photovoltaic sector.
Patent Deal Sets Precedent for Industry Costs
The market's focus was drawn this week to the disclosure of a significant patent licensing agreement. Shanghai Aiko Solar Energy and Maxeon Solar Technologies, a unit of TCL Technology Group, announced a deal covering back-contact (BC) solar cell and module patents for territories outside the United States. The total licensing fees are set at 1.65 billion yuan, with an initial payment of 250 million yuan due in 2026. The license grants Aiko non-exclusive rights for a 15-year term, including any patents Maxeon adds over the next five years. TCL clarified the fee is a fixed, bundled sum, not subject to market or sales volume fluctuations, with a daily penalty of 0.05% for missed payments.
This agreement effectively establishes a public price tag for critical BC technology intellectual property. BC design, which moves electrical contacts to the rear of the cell to reduce front-side shading and improve efficiency, has been a focal point of legal disputes. The precedent set by this deal could have significant cost implications for Chinese solar manufacturers, particularly those targeting export markets with stringent patent enforcement.
Softer Demand Outlook for 2026
Concurrently, the industry is grappling with a softening domestic demand forecast. According to a roadmap shared by state media Xinhua, China's photovoltaic industry association projects new solar installations for 2026 to be in the range of 180 to 240 gigawatts. This represents a step down from anticipated 2025 levels. An official from the Ministry of Industry and Information Technology described the coming year as pivotal for addressing "involution"—the industry term for the intense price wars that have plagued the sector following a period of rapid capacity expansion.
This combination of potentially higher, more transparent IP expenses and a less robust demand picture presents a fresh dilemma for LONGi shareholders. The key question is whether these costs will simply add to the existing margin pressures in a market characterized by soft pricing, or if broader cross-licensing agreements could ultimately reduce legal uncertainties and facilitate smoother exports.
Broader Patent Landscape and Legal Context
The licensing pact is situated within a wider, ongoing patent dispute encompassing both BC and TOPCon (tunnel oxide passivated contact) high-efficiency cell technologies. This legal battle has already involved major players like LONGi and JinkoSolar across multiple jurisdictions. Analysts note that the non-exclusive nature of the Aiko-Maxeon deal means Maxeon could grant similar rights to other manufacturers, potentially shaping the competitive and cost structure for advanced solar technology adoption globally.
Market Calendar and Upcoming Catalysts
Investors face a compressed trading window to digest these developments. The Shanghai Stock Exchange will close for the Spring Festival holiday beginning February 15, with trading scheduled to resume on February 24. This leaves only a handful of sessions for position adjustments or final filings before the break.
Looking ahead, the next major catalyst for LONGi will be the release of its 2025 annual report, with data providers indicating an expected publication date of April 29. In the immediate term, market participants will monitor for further patent settlement news, shifts in solar supply chain pricing, and any policy signals aimed at mitigating low-cost competition as the holiday period approaches.
