Suntech Reduces Solar Cell Production Capacity, Affecting 1,500 Employees


Suntech Power Holdings Co. Ltd. has temporarily closed a portion of its solar cell production capacity in Wuxi, China. The company says the move was made in order to reduce production costs and operating expenses.

‘In this rapidly evolving solar market, it is crucial to evaluate market trends and adapt our business to suit,’ explains Suntech CEO David King. ‘In light of the preliminary U.S. anti-dumping tariff, the European anti-dumping investigation and oversupply of solar modules, we have decided to right-size our production capacity and continue to optimize our organization.’

The company aims to return to positive operating cashflow next year, King adds. With the recent changes, while Suntech's operational solar cell capacity will temporarily be reduced to 1.8GW, module capacity will remain at 2.4GW and wafer capacity will remain at 1.6GW. The consolidation of solar cell capacity is expected to affect approximately 1,500 employees in China.

The restructuring initiatives are expected to substantially improve the utilization rate of solar cell production facilities, Suntech notes. In addition, Suntech's panel cost is expected to improve as production will be concentrated at the company's highest efficiency, lowest-cost manufacturing facilities.

In addition to tariff issues, Suntech is also dealing with ongoing legal problems and the departures of two high-profile executives.

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