Jennifer Runyon, Managing Editor, RenewableEnergyWorld.com
October 17, 2012 | 5 Comments
New Hampshire, USA -- As solar module manufacturers continue to struggle to stay afloat in an oversupplied market, one more major player is planning to restructure. Yesterday module manufacturer SunPower announced its plan to idle half of its Fab 2 production lines in the Philippines and lay off 900 employees. The company said in a statement that the re-organization is a temporary measure.
"Industry conditions continue to be challenging and while it is never an easy decision to reduce positions, we must make prudent decisions to effectively compete in an industry with significant overcapacity. Additionally, we'll further our efforts to reduce costs and improve operational efficiencies," said Tom Werner, SunPower President and CEO, in the statement. He added that the company continues to make strong progress on its cost reduction roadmap and remains committed to reaching its cost per watt goal of less than $0.75 per watt on an efficiency adjusted basis for SunPower's lowest cost solar panels by the end of 2012.
The company said that its previously disclosed Fiscal Year 2012 earnings guidance remains unchanged. SunPower will provide additional details on its strategic initiatives during its third quarter 2012 earnings conference call on Nov. 1, 2012.
SunPower expects restructuring charges to total $10 million to $17 million, composed of severance benefits, lease and related termination costs and other associated costs, the majority of which will likely be in the fourth quarter 2012. The company expects that greater than 90 percent of these charges will be cash.
Yesterday RenewableEnergyWorld.com reported that GTM Research is predicting 180 module manufacturers will cease operations or succomb to acquisition over the next year and SunPower's announcement is just another symptom of the painful consolidation that is happening in the unhealthy solar module manufacturing landscape. According to the GTM report, the current downturn in the worldwide PV manufacturing segment is likely to last until 2014.
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