HONG KONG (Reuters) - Solar equipment maker GT Solar International Inc SOLR.O could see a correction next year for its cycle-prone solar wafer unit, although strong demand for polysilicon would help to counter the slowdown, its CEO said on Tuesday.
Advance orders for the company’s furnaces to produce multi-crystalline solar wafers are currently solid, but the company is taking a conservative stance until it logs actual sales, said GT Solar CEO Tom Gutierrez.
“We are being cautious in saying that we think there’ll be a correction in 2011,” he said, talking at the Reuters Global Climate and Alternative Energy Summit in Hong Kong. “It’s a cyclical industry.”
Demand for solar products in China, which accounts for more than half of GT Solar’s turnover, has led to a surge in sales to Chinese solar wafer makers such as LDK Solar LDK.N, Yingli Green Energy YGE.N and Trina Solar TSL.N, analysts said.
In early August, GT Solar, which also sells reactors to make polysilicon, raised its fiscal 2011 outlook citing strong demand and improving solar industry fundamentals.
China has announced a 5 trillion yuan ($736 billion) investment plan on clean energy in the next decade, aiming to lift the non-fossil fuel component of its supply to 15 percent of its total primary energy demand by 2020, from under 8 percent last year.
Gutierrez added that any correction in the solar wafer business could be offset by continuing strong demand for polysilicon.
“The polysilicon pipeline is growing right now,” he said. “You’re seeing spot prices for polysilicon start to significantly increase. Most of our customers are planning significant additions in the polysilicon area.”
The Merrimack, New Hampshire-based company has an order backlog of more than $1 billion, said Gutierrez, who was appointed chief executive last November.
The firm, which has a debt-free balance sheet, is looking for opportunities in the monocrystalline silicon business, he added.
In late July, GT Solar said it would buy privately held sapphire maker Crystal Systems for about $57.8 million in cash and stock, giving it a foothold in the fast-growing LED industry.
The company, which opened its Asian headquarters in Hong Kong on Tuesday, expects to have more than half of its employees in Asia by the end of the year, said Gutierrez, who spends more than half of his time in the region.
Shares in GT Solar have risen about 60 percent so far this year, giving the firm a market capitalization of $1.23 billion. But the stock is still down about 29 percent since its debut on the Nasdaq in 2008.
Editing by Doug Young