Maxeon Q2 dogged by supply chain volatility as well as manufacturing facility closures

Aug 14, 2021 11:36 AM ET
  • Maxeon Solar Technologies has said it may encounter producing disruptions if it is unable to mitigate the effects of resources as well as component cost increases from its vendors.
Maxeon Q2 dogged by supply chain volatility as well as manufacturing facility closures
Image: Maxeon Solar Technologies

The module producer said it will certainly remain to hinge on a number of third-party suppliers for certain resources as well as components which might prevent it from delivering products to consumers within called for timeframes as well as may, consequently, result in terminations, charge repayments as well as loss of market share.

It remains to experience raised freight rates from Asia and Mexico, as well as higher expenses of certain basic materials such as glass, aluminium and also copper, as well as silicon wafers and solar cells.

With logistics costs increasing as a result of the combined impact of COVID-19 and the worldwide lack of container capability, Maxeon signalled that it may be unsuccessful in achieving higher costs from its clients to compensate for the boosted prices, which might have a negative impact on its financial problem.

Consisted of in Maxeon's second quarter results announcement yesterday, the warnings represent an extension of the supply chain issues kept in mind by various other suppliers in current weeks. "We remain to encounter tough headwinds from a supply chain expense point of view," stated CFO Kai Strohbecke in a teleconference with capitalists.

Meanwhile, COVID-19 interruptions in Malaysia have actually indicated Maxeon's manufacturing facility in the country has actually been closed for part of July as well as August for disinfection. It is anticipated to continue to be shut until 19 August.

But despite the headwinds, the manufacturer described prospective capacity development plans within its Q2 results disclosure. In the United States, the company exposed it has actually sent an application with the Department of Energy for support in establishing a 3GW solar cell as well as module manufacturing facility. Pending successful settlement of a DOE financing assurance and also the passage of regulation such as the Solar Power Manufacturing for America Act as well as the American Jobs in Energy Manufacturing Act, Maxeon plans to progress with the strategies with an objective of beginning module manufacturing in 2023.

In its Q2 results declaration, the company, spun out from SunPower last year, disclosed it increased both shipments and also earnings on last year's 2nd quarter. Shipments rose from 428MW to 434MW as well as earnings increased 6.6% year-on-year to US$ 175.9 million.

Maxeon said the income boost remained in part due to lower impact from COVID-19 in the United States compared to the very same quarter last year and "stable growth" in European markets. Around 27% of profits from the quarter represented sales of solar modules to SunPower. In spite of the shipment rises, the business taped a bottom line of US$ 77 million, contrasted to a loss of US$ 46.6 million in the matching duration last year.

Maxeon's distributed generation business in Europe reported record revenue in the quarter. "We're seeing solid growth in both our Maxeon as well as Efficiency items, and also we believe that we will certainly remain to grow our share in 2021 in almost every European market we offer with especially considerable share development in Italy, France and the Netherlands," stated Chief Executive Officer Jeff Waters.

"We're really urged by the current United States legal propositions with motivations that sustain domestic solar production," Seas stated.

In the 3rd quarter of 2021, Maxeon prepares for shipments to be in the series of 580MW to 640MW, while earnings is expected to be between US$ 220 million and also US$ 240 million.

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