Canadian Solar unveils PV manufacturing strategy shift targeting greater control over upstream supply
- Canadian Solar has actually unveiled a brand-new PV production strategy, bringing even more upstream capacity inhouse to minimize its direct exposure to rates volatility.
Reporting its Q1 2022 results today, Canadian Solar exposed that it plans to create 10s of gigawatts of solar ingot, wafer and also cell capacity in the 2nd half of this year at a complete capex cost of around US$ 850 million.
Shawn Qu, chief executive at Canadian Solar, claimed the extra vertically incorporated structure-- or 'trapezoidal', as Qu explained it on a teleconference with analysts complying with the results disclosure, as opposed to the pyramid structure it has preserved historically-- would provide the firm's manufacturing division CSI Solar extra control over prices, modern technology as well as item quality.
" This will meaningfully enhance the upright assimilation level of our manufacturing capacity as well as strengthen our international management setting. In this process, we expect to gain far better control of price, innovation and also product quality," Qu said.
Last November, when the company reported its Q3 2021 outcomes, Canadian Solar mentioned that its desired production capacities at the end of 2022 were to be 10.1 GW of ingots, 11.5 GW of wafers, 13.9 GW of solar cells and also 32GW of modules. Particularly business claimed it was stopping plans to increase its solar cell capacity, fearing overcapacity in the short term.
Those capacities have actually now been changed, reflecting a pattern in the direction of a much more vertically incorporated future for its manufacturing output while replying to provide and require trends.
CSI Solar currently anticipates to end up the year with 20.4 GW of ingot capacity, 20GW of wafer capacity, 19.8 GW of cell manufacturing result and, unchanged from its first expectations, 32GW of module assembly capacity.
Around 4GW of module assembly capacity is anticipated to be added in H1 this year, while all other capacity developments-- 15GW of solar ingot capacity, 9.5 GW of wafering capacity and also 5.9 GW of solar cell capacity-- are to be included the second half of 2022. Qu verified all included capacity will certainly be based in Asia, divided in between facilities in China as well as Thailand.
Speaking to analysts, Yan Zhuang, head of state at CSI Solar, said the business took into consideration that the solar sector had actually reached a phase where it is experiencing lasting growth but called for stability in order to do well.
" Stability is ending up being instrumentally vital to our service to compete with our peers," Zhuang said, adding that, with margins getting thinner, companies can no more speculate with investments.
Shipments scrape into guidance as US imports continue
Canadian Solar today validated Q1 module shipments to have stood at 3.63 GW, simply within its guidance of 3.6-- 3.8 GW for the quarter.
Revenue additionally was available in simply within the business's formerly stated advice at US$ 1.25 billion, nevertheless that figure was up 15% year-on-year, reflecting the wider industry pattern for raising prices.
The business's gross margin of 14.5%-- additionally just within its support of 14.5-- 15.5%-- was up by more than 5 portion factors year-on-year.
Perhaps most interestingly from Canadian Solar's shipments figure is the news that the supplier is remaining to ship to the US market despite the risk postured by the Division of Business examination right into alleged circumvention of anti-dumping tolls. Canadian Solar was recently named as one of eight producers to have obtained a mandatory questionnaire from the DOC for its activities in Thailand.
Canadian Solar named the United States as one of its leading 5 markets for the opening quarter of 2022 and also its geographic split for module shipments remained unchanged quarterly, 39% still shipping to the Americas.
Zhuang verified to experts that Canadian Solar is still shipping to the United States, albeit under various contractual conditions to reflect the intrinsic threats. The business is now shipping to United States clients at a premium to cover the threat, as well as Canadian Solar is also preserving the right to terminate shipments in case policy "heads out of certain lines", Zhuang claimed, with the rates at which tariffs are to be set still unclear.
Canadian Solar stated its advice for the full year, projecting Q2 2022 shipments to stand within a variety of 4.9-- 5.1 GW, revenues to find in at US$ 2.2-- 2.3 billion and also gross margin to be the same at 14.5-- 15.5%.