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Solarmax was the fifth largest photovoltaic (PV) inverter supplier in the world in 2008, with a market share of over 4 percent. Its market share has declined each year since, and it held a share of less than 1 percent in 2013.

It was largely of a victim of a severe decline in the European PV inverter market, which has fallen from $5.5 billion in 2010 to $1.9 billion in 2013.

It is forecast to decline by a further 25 percent in 2014. This collapse has been caused by a significant slowdown in core European markets, and intense price pressure driven by a highly competitive and overcrowded landscape for suppliers.

Solarmax had also made efforts at internationalising its business to offset the decline of Europe, by entering into the United States solar market in 2013. It had struggled to gain significant market share due to the intense competition from local manufacturers of string inverters such as Advanced Energy and Solectria, as well as numerous other European and Asian suppliers employing similar internationalisation strategies.

In recent years, it had also focussed on string inverters due to the rapid declines in utility-scale markets in Europe and the high upfront costs of establishing local manufacturing for central inverters in new international markets.

IHS predicts that price pressure in Europe will continue, with average annual declines in the region of 5 to 10 percent each year for the coming five years.

Therefore the exit of Solarmax, which has been a major player in the European market, will provide only limited relief to the incredibly tough competitive environment that suppliers focused on Europe continue to face.