Maxeon counts on air, rail products as shipping 'logjam' adds to Q3 shipments miss

Nov 19, 2021 12:40 PM ET
  • Maxeon Solar Technologies is overhauling its logistics approach after a shipping "logjam" credited to the module manufacturer missing its Q3 deliveries advice.
Maxeon counts on air, rail products as shipping 'logjam' adds to Q3 shipments miss
Image: Maxeon Solar Technologies

Maxeon reported Q3 module shipments of 566MW, missing its quarterly assistance of 580MW-- 640MW. But Jeff Waters, the business's president, said this guidance miss was mainly to global shipping constraints that implied more than 200MW-- comparable to around 37% of quarterly shipments-- of modules continued to be on the water at the end of the third quarter and, therefore, could not be identified.

Through contrast, Maxeon said at the end of Q2 2021 around 118MW, or 26% of quarterly deliveries, stayed in transit.

The acceleration of worldwide delivery blockage, as well as with it freight expenses, coincided with a more comprehensive spike in supply chain costs that happened "all of a sudden" in Q3, Maxeon stated. Waters added that the business's highest exposure outbound Asia freight pricing.

Subsequently, Maxeon has worked with "changing" the layout of its module product packaging to increase packaging thickness by 5%-- something other module manufacturers have actually also considered-- and changing the freight of some solar cell shipments from Asia to its module fab in Mexico to airfreight, preventing particularly clogged ports in The golden state. Additionally, the business is likewise working to develop outgoing Asia rail transport abilities to service its European centers, something which Waters said would certainly provide Maxeon a "significant speed benefit" and also additionally options in Europe.

Nevertheless, the price of wafers additionally climbed "beyond expectations" in the quarter as well as, paired with various other rate increases for products including glass, steel and encapsulant, Maxeon stated its overall supply chain costs had actually enhanced by about 15% year-on-year.

In spite of missing its deliveries advice, Maxeon practically strike its income support for the quarter, reporting earnings of US$ 220 million. The firm likewise managed to shrink its quarterly bottom line marginally, down 3.5% to a net loss for the period of US$ 65.4 million. Its gross loss for the period stood at US$ 16.7 million.

In assistance for Q4 2021, Maxeon expects module shipments to find in at the 540MW-- 570MW range-- the mid-point of which would comprise a consecutive decrease in shipments, regardless of Q4 being traditionally a more busy period-- which the business again credited to supply chain restraints.

Its forecasted income array for Q4 2021 is US$ 215-- 235 million, corresponding to a gross loss of US$ 5-- 15 million.

The producer did, nevertheless, tension that the results likewise remain to consist of losses related to its out-of-market polysilicon agreement with Hemlock, which secures Maxeon into acquiring established quantities of the product on a take-of-pay basis. Speaking with analysts, Waters said the firm could yet look to discuss a new deal with Hemlock provided the current high market value for polysilicon and also prospective advantage of selling extra quantities of the product, however emphasized that any kind of contract would certainly look to be on even more variable terms and all but dismissed signing an expanded contract on fixed-price, take-of-pay terms once more.

Technology and also production upgrade

Maxeon additionally gave an update on its technology and product set in addition to manufacturing plans. It confirmed it had shipped its very first Maxeon 6 modules in October and also is looking to establish 200MW of producing ability of the product in Q4 2021, ramping up to 500MW in 2022. The business is also wanting to increase in-house production capacity of the Maxeon 6 to 250MW and also of its Performance line to 1.8 GW next year, greater than trebling its internal capability contrasted to Q3 which would assist it understand "improved gross margins", the business stated.

Maxeon additionally verified it had actually finished its Maxeon 7 pilot line as well as manufactured its very first G12 (210mm) format cells in its Fab 3 center in Malaysia.

The maker is continuing to analyze its choices for ability development, and also kept in mind certain motion in the United States related to the Solar Energy Manufacturing for America bill, which plans to establish subsidies for solar suppliers in the US and also is readied to be consisted of within Head of state Joe Biden's Build Back Better act.

Additionally, Maxeon confirmed it had actually continued to the second stage of the US Department of Energy's logan guarantee procedure, which it hopes will help finance the growth of a 3GW solar cell as well as module facility in the United States.

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