First Solar, Inc. (Nasdaq: FSLR) announced today that it is reallocating production capacity at its Kulim, Malaysia, facility to support a new assembly line dedicated to the company’s recently announced Series 5 thin film photovoltaic module offering.
As a result, First Solar will end production of its TetraSun crystalline silicon solar panel product currently manufactured there, and expects to incur impairment and related charges of approximately $90 million to $110 million, substantially all of which is expected to be non-cash. These actions are expected to reduce First Solar’s operating expenses by $2 million to $4 million this year and $8 million to $10 million annually going forward.
The shift in production capacity is driven by First Solar’s long-range business plan, which focuses on maximizing the company’s core technology based on the thin film Cadmium Telluride (CdTe), according to Chief Operating Officer Tymen de Jong.
“Over the past two years, execution of our CdTe technology roadmap has positioned the product as the industry leader for utility-scale solar, as well as established a promising path into the future. The Series 5 module, and the Series 6 module still in concept development, are game-changing products that position us for exciting growth. They require the full attention of our manufacturing operations,” said de Jong.
“TetraSun is a sound technology for space constrained rooftops, and served largely as a hedge against CdTe technology competitiveness that had challenged us in the past,” he added. “With the success of our CdTe roadmap reflected in our record 22.1% cell efficiency, along with the proven higher energy yield and superior performance inherent in our thin film technology, that hedge is no longer needed.”
With this production transition, virtually all of the Kulim production associates previously assigned to the TetraSun line will move to the Series 5 assembly line, which will be in full operational mode by early 2017.
About First Solar, Inc.
First Solar is a leading global provider of comprehensive photovoltaic (PV) solar systems which use its advanced module and system technology. The company’s integrated power plant solutions deliver an economically attractive alternative to fossil-fuel electricity generation today. From raw material sourcing through end-of-life module recycling, First Solar’s renewable energy systems protect and enhance the environment.