Nov 3, 2011 (Bloomberg)—First Solar Inc., the world’s largest maker of thin-film solar panels, postponed plans to complete a factory in Vietnam as part of an effort to cut capital spending.
First Solar CEO Rob Gillette stepped down last week after almost doubling output capacity as the market surplus grew and prices for solar panels tumbled. Three solar manufacturers in the U.S. have tipped into bankruptcy this year including Solyndra LLC, recipient of a $ 535 million U.S. loan guarantee.
Chairman Michael Ahearn, who stepped in as acting chief executive officer last week and cut the company’s sales and profit forecast, will focus on completing a new factory in Mesa, Arizona, and implementing improvements to existing production lines in the U.S., Germany and Malaysia. The Tempe, Arizona- based company announced the delay in a statement today.
The solar industry is responding to a worldwide surplus of polysilicon and panels that’s lowering income, prompting some companies to reevaluate their operations, said Hari Chandra Polavarapu, an analyst at Auriga USA in New York.
“The Chinese guys are building out capacity hoping the customers will come and that’s caused this huge oversupply situation,” Chandra Polavarapu said yesterday in an interview. “What we need to see a focus on is more market development, and to layer in capacity to meet that demand.”