SunPower reduces manufacturing capacity in Philippines

The U.S.-based solar company has taken the "strategic decision" to consolidate its Philippine cell manufacturing operations into Fab 2 this quarter, and shall begin repurposing Fab 1. With regards to the future of Fab 1, it says it is working with a number of parties, including Deca Technologies, of which it is a minority shareholder. The employees will either move to Fab 2, or may have the opportunity to work for the new Fab 1 tenants, said SunPower in a statement released, while some equipment will be transferred "to reduce manufacturing constraints".

While the company currently has two cell lines in operation in the Philippines, it expects that all 12 lines will be converted at Fab 2 by the end of 2012. Overall, it has three fabs there. SunPowerÂ’s Maxeon Gen E cells, which began commercial production at the end of March, are a "top priority". The company claims its 24 percent efficient, "all-back contact" cell produces more energy per square meter and features a better temperature coefficient that conventional crystalline cells.

President and CEO, Tom Werner, commented, "This decision will enable us to rationalize our operating expenses, improve supply chain efficiency and lower our manufacturing cost per watt through scale advantages. The reduction of approximately 125 megawatts of nameplate capacity at Fab 1 will be partially offset by further improvement in yields and equipment efficiency in Fab 2 and Fab 3."

The company added that its cost reduction initiatives "remain on track" and that it should have reduced its number of manufacturing steps by 15 percent by the end of the year. "Combined with additional yield and equipment efficiency improvements, the company expects to achieve its cost goal of approximately $0.86 per Watt, on an efficiency adjusted basis, exiting 2012," explained the statement.

Looking at the financial impact of its restructuring plans, SunPower said it expects to see pre-tax GAAP charges in totaling US$51 million to $69 million, primarily non-cash asset impairment charges of $40 million to $54 million, and other cash-based associated costs of $11 million to $15 million, for the closure of Fab 1.