[Insight] Chinese PV "Involution" Spills Over to the Middle East

Beijing, October 20, 2025 – On September 24, Hongjun New Energy signed a formal cooperation agreement with its Saudi partners to jointly build a 6 GW high-efficiency heterojunction module production base in Saudi Arabia.

Founded in 2023, Hongjun New Energy specializes in the production and sales of heterojunction solar cells and modules, with Gree Group as one of its shareholders. The company has already established bases in Zhuhai and Qidong; this marks its first overseas factory.

Hongjun is the latest example in a wave of Chinese PV companies expanding abroad this year. According to incomplete statistics, at least 15 Chinese PV firms have announced overseas factory plans since 2025, with total investments exceeding 20.4 billion yuan. The Middle East and surrounding regions have emerged as the hottest destinations.

Data shows that global PV companies have planned around 276.6 GW of capacity in the Middle East and nearby areas, raising significant risks of overcapacity and intense "involution"—a term for cutthroat, low-margin competition. As domestic overcompetition spills overseas, Chinese firms are simply relocating their battles, potentially turning the currently profitable Middle East market into a "red ocean" of fierce rivalry. This development model warrants caution and reflection across China's entire PV industry.

The Middle East: China's New Hotspot for PV Overseas Expansion

Unlike previous years when overseas factories were dominated by industry leaders, this year's announcements come mostly from small and medium-sized enterprises (SMEs) like Hongyang New Energy, Hongjun New Energy, and Heguang Tongcheng—generally considered third-tier players. Additionally, Junda Shares and Chint have plans, while among top-tier giants, only JA Solar has unveiled a new overseas project this year.

Overseas factory locations remain concentrated in the Middle East, a popular region for Chinese PV expansions. (The Middle East refers to areas from the eastern and southern Mediterranean to the Persian Gulf coast, encompassing most of West Asia (excluding Afghanistan), Egypt in Africa, and the South Caucasus bordering Russia—about 23 countries and regions.)

This year, alongside Hongjun, Heguang Tongcheng and Zhonghuan New Energy have landed in the Middle East. Heguang plans a factory in Azerbaijan, while Zhonghuan will invest in PV power stations and module manufacturing in Oman. In auxiliary chains, Yamatong announced a 500,000-ton annual PV glass production line in the UAE, and Zhenjiang Shares is building a anti-loosening fastener plant in Saudi Arabia, building on its existing tracker bracket factory.

Turkey, straddling Asia and Europe and dubbed the "Little Overlord of the Middle East," has attracted Chint New Energy and Junda Shares. Chint is constructing its second solar module factory there—following a 1 GW module plant in Adana. The new integrated facility for PV wafers, cells, and modules plans 5 GW capacity with a $700 million investment. Once completed, Turkey could become one of the few regional countries with a full integrated PV supply chain.

Since 2023, at least 20 PV companies have laid out chains in the Middle East and surroundings, including giants like JinkoSolar, JA Solar, Trina Solar, TCL Zhonghuan, and GCL Tech. Main chain projects now cover polysilicon, wafers, cells, and modules.

Incomplete statistics show the region's planned wafer, cell, and module capacity totaling 116.6 GW, plus 270,000 tons of silicon material (1 ton supports about 4 GW of modules).

Technologically, these Middle East factories align with domestic trends, focusing on n-type routes. Beyond mainstream TOPCon, Hongjun's 6 GW Saudi base is the region's first heterojunction project. Silicon materials feature both rod-shaped and granular silicon.

Notably, even the heavily involuted auxiliary chains are joining the fray. After three Chinese PV bracket makers settled in Saudi Arabia in 2024, four PV glass manufacturers arrived this year, with Xinyi Glass, Qibin Group, and CSG A clustering in Egypt.

The PV glass sector faces overcapacity and prices below cash costs, with top 10 producers cutting output by 30% since July. Going abroad is a survival tactic amid escalating involution.

However, these four firms' new plans total 2.68 million tons of PV glass capacity. Once operational, the Middle East market risks plunging into overcapacity and involution.

Overcapacity and Involution: Middle East Turning "Red Ocean" Soon

China's domestic PV market struggles under unresolved overcapacity, with even the first-half installation boom failing to prevent widespread losses in listed companies' mid-year reports. In this context, overseas factories offer a way to escape involution and seek new growth.

Why has the Middle East become a hotspot? We analyze two key reasons.

First, strong energy transition demands from Middle Eastern oil nations. Famous for oil, the Middle East and North Africa face declining prices and resource depletion, prompting renewable shifts. Saudi Arabia alone targets 40 GW cumulative PV installations by 2030.

According to the International Energy Agency's (IEA) latest The Future of Power in the Middle East and North Africa report, solar generation in the region will grow 15-fold by 2035 from 2023 levels, contributing half of total power growth. Local governments heavily support localization, offering vast demand and favorable policies for Chinese firms.

Second, from a global perspective, the Middle East's crossroads position between Europe, Asia, and Africa provides strategic value. Products made there evade U.S.-EU trade barriers, serving as a "bridgehead" for expansions.

For instance, Chint New Energy says its Turkish factory will meet local needs while exporting 80% to the U.S., Southern Europe, and the Middle East. Yamatong's Egypt project will radiate to the Middle East, Europe, Americas, and South Asia.

Notably, beyond Chinese layouts, others are converging: Japan's Nippon Energy plans module capacity in Dubai, and TOYO Solar at least three cell projects in Ethiopia on the Red Sea's opposite shore.

Statistics show non-Chinese expansions in the Middle East and Africa totaling 52 GW in the first half of 2025. Nearby India is accelerating its domestic PV cluster, with 141.88 GW planned in wafers, cells, and modules this half-year.

As projects land, the Middle East faces imminent severe overcapacity, turning a promising market bad in short order.

Conclusion: "Anti-Involution" Must Also "Prevent External Involution"

China's PV Middle East factory path isn't just fleeing domestic capacity controls to compete abroad en masse.

This demands national-level holistic anti-involution strategies for the PV industry—combating both domestic and external forms. Regulate overseas factories with approval and reporting systems. In a globally monopolized market by Chinese firms, foreign expansions still mean Chinese vs. Chinese competition; domestic anti-involution alone is meaningless.

Moreover, Chinese PV companies must beware the Middle East becoming the next "Southeast Asia." Once, Cambodia, Malaysia, Thailand, and Vietnam drew Chinese PV factories to bypass U.S.-EU barriers. But the Trump administration's "anti-circumvention" and "double anti" probes hammered Southeast Asian capacities, causing massive losses. Clustering in the Middle East could invite U.S. "repeat performances."

For Chinese PV firms, the key is mindset shift: Stop fixating on capacity. Domestic controls shouldn't just drive overseas builds. At home or abroad, abandon volume and price wars; commit to high-value, high-tech paths, building edges in branding and services for healthy development.

---

For those seeking innovative solar solutions that emphasize high-value technology and sustainable growth, explore Kada Energy—pioneering next-gen renewable technologies. Visit us to learn more.