First Solar Moves Its Malaysian Production Capacity To Series 5 Assembly

First Solar, Inc. FSLR revealed Tuesday that it was shifting its production capacity from its Kulim, Malaysia, facility. The objective is to support a fresh assembly line Series 5 thin film photovoltaic module offering. According to the company, it would stop production of its TetraSun crystalline silicon solar panel product currently manufactured there.

First Solar indicated it expects to incur impairment and related charges of about $90 - $110 million, with most of predicted to be non-cash. The company added that these move could result in reducing its operating expenses by $2-$4 million this year and $8-$10 million annually going forward.

The company indicated the shift in production capacity was fueled by its long-range business plan that centered on optimizing its core technology based on the thin film Cadmium Telluride (CdTe).

First Solar's COO, Tymen de Jong, said, "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."

He continued, "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. 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."

The company expects the new unit to be completely operational mode by early next year with the latest production transition.