Sanyo to spend $83 mln to lift solar cell capacity

TOKYO, June 23 (Reuters) - Japan's Sanyo Electric Co Ltd (6764.T) said on Tuesday it would spend 7.9 billion yen ($83 million) to boost its solar cell output capacity by 26 percent, as the company tries to keep pace with bigger rivals.

Sanyo, which competes with Q-Cells (QCEG.DE) and Sharp Corp (6753.T) in solar cells, plans to expand production capacity at one of its two solar cell plants in western Japan by 90 megawatts, lifting its total capacity to 430 megawatts a year by April 2010.

That compares with Sharp's current annual production capacity of 710 megawatts. Sharp plans to expand further by starting up a new plant in Japan by March with initial capacity of 480 megawatts.

Sales of solar cells, which convert solar energy into electricity, are expected to grow rapidly as concerns over climate change prompt businesses and consumers to shift to cleaner energy sources.

Shares in Sanyo, which is set to be acquired by larger electronics maker Panasonic Corp (6752.T), closed down 4.5 percent at 253 yen, underperforming the Tokyo stock market's electrical machinery index .IELEC.T, which fell 2.6 percent. (Reporting by Kiyoshi Takenaka; Editing by Edwina Gibbs)