UPDATE 1-SunPower to build new plant in Malaysia

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LOS ANGELES, May 19 (Reuters) - SunPower Corp SPWR.O said on Monday it would build a new photovoltaic solar cell manufacturing plant in Malaysia capable of producing more than 1,000 megawatts (MW) of cells per year.

With the announcement, SunPower becomes the latest solar company to set up shop in Malaysia. Thin film producer First Solar Inc (FSLR.O) and Germany's Q-Cells AG (QCEG.DE) are also investing in plants there.

SunPower's other solar cell plants are in the Philippines, where the company is rapidly increasing production in response to soaring global demand for renewable energy sources.

The San Jose, California-based company had total annual manufacturing capacity of 214 MW at the beginning of 2008 and expects to increase that to 414 MW by the end of the year.

A megawatt is enough power to supply 750 homes.

In a statement, SunPower Chief Executive Tom Werner said the new plant would be critical to reducing its production costs by 50 percent by 2012.

Solar cell production at the plant is expected to begin in 2010.

The first phase of construction of SunPower's third fabrication plant will be comprised of 14 solar cell production lines, each with a capacity of 40 megawatts per year, the company said.

SunPower shares were up $1.59, or 1.7 percent, at $95.09 on Nasdaq. SunPower is majority owned by Cypress Semiconductor Corp (CY.N) (Reporting by Matt Daily and Nichola Groom; Editing by Derek Caney and Andre Grenon)