SHANGHAI, June 6 Suntech Power Holdings Co Ltd
STP.N, China's largest solar panel marker, plans to invest
2.68 billion yuan ($393 million) to build 1 gigawatt in
additional production capacity in Shanghai over the next three
years as it rushes to meet surging demand, Chairman Zhengrong
Despite an expected cut in German solar power subsidies in
July that analysts warn will dampen third-quarter demand, Shi
told a briefing for reporters on Saturday that returns for
power producers in that market would still be attractive, while
other markets such as the United States were growing rapidly.
"We're all sold out for this year. We're short of capacity
and can't meet our clients' needs," he said.
"We have a backlog in the second quarter. We have a backlog
in the third quarter. We haven't seen any impact from the
reduction in German subsidies."
He predicted that Germany, the biggest market for solar
cells, would see 70 to 80 percent full-year growth this year,
while the U.S. market would double in size in the second half
of the year from the first half, reaching 1 GW for the full
The first phase of the company's new Shanghai plant, with
180 megawatts of production capacity, would be completed at the
end of June, he said, putting it easily on course to reach its
total production capacity target for this year of 1.4 GW, after
reaching 1.2 GW at the end of the first quarter.
Shi added that expansion of thin-film manufacturing
capacity in Shanghai, now at 200 megawatts, may be delayed due
to low competitiveness of thin-film modules and a need for
further research and development to boost conversion rates.
He also reiterated that the fall in the euro was taking a
heavy toll on the company's bottom line.
Suntech announced first-quarter results on Thursday in line
with Wall Street expectations, although it took a larger than
expected hit from the weak euro. [ID:nN03187089]
Europe accounted for 68 percent of Suntech's product sales
in the first quarter, down from 74 percent for all of 2009.
Rivals such as Trina Solar Ltd TSL.N and First Solar
(FSLR.O) also rely heavily on sales to Europe.
(Reporting by David Lin and Edmund Klamann; Editing by Sugita