UPDATE 2-Jabil to build SunPower solar panels in Mexico

*Jabil to build SunPower solar panels at Mexican plant

*First step in implementing regional panel assembly

*Financial terms not disclosed

LOS ANGELES, June 8 (Reuters) - Solar power company SunPower Corp (SPWRA.O) said on Monday it had signed a contract with electronics maker Jabil Circuit Inc (JBL.N) to build solar panels in Mexico beginning in the second half of 2009.

Jabil will start making solar panels for SunPower's North American solar customers in the second half of 2009, SunPower said in a statement. The San Jose, California, company said the deal was the first step in its long-term strategy to implement regional panel assembly to reduce costs.

SunPower currently produces its solar panels in the Philippines and has a partnership with SunEnergy in China. It is also looking at establishing manufacturing in large solar markets in the United States, the company said.

Financial details of the multi-year contract were not disclosed. Estimated production and jobs will be determined by demand, SunPower spokeswoman Helen Kendrick said, adding that the panels will be made at Jabil's facility in the Mexican state of Chihuahua.

The deal with St. Petersburg, Florida-based Jabil comes as solar companies are grappling with a lack of financing for solar projects amid the worst banking crisis in decades. The lack of funds has forced manufacturers to cut prices for the photovoltaic systems that turn sunlight into electricity.

"This agreement provides SunPower with the flexibility to site manufacturing near the largest and fastest growing solar markets in North America, improving the efficiency of our supply chain," SunPower Chief Operating Officer Marty Neese said in the statement.

SunPower, the market leader in North America, posted an unexpected first-quarter loss but said last week that the market for solar power was rebounding, helped in part by the federal stimulus package passed earlier this year. (Reporting by Nichola Groom and Matt Daily)