First Solar weighing expansion plans as demand surges amidst supply chain obstacles

First Solar is actively exploring future capacity manufacturing locations after recording a surge in demand, both domestically and internationally, amidst supply chain obstacles impacting the PV industry.
Reporting its Q3 results after market close yesterday (4 November 2021), thin film manufacturer First Solar revealed it had a surge in demand throughout the reporting period, resulting in a considerable swelling of its total bookings potential and mid-to-late stage opportunities.
At the company’s Q2 results in July, First Solar placed total booking opportunities at 26.8GWdc, the majority of which – some 17.3GW – originated from its domestic market in the US. This translated to around 9.2GWdc of opportunities determined to be at a mid or late-stage, again nearly three-quarters of which (6.8GWdc) was from the US.
Within the three months ended 30 September, however, these figures grew considerably, with total booking opportunities rising to nearly 45GWdc, while mid-to-late stage opportunities more than doubled to 21.4GWdc. Mid-to-late stage opportunities in the US almost trebled to 18.5GWdc, reflecting the strength of demand for First Solar’s modules in its home market.
First Solar said it was effectively sold out for 2022 and had already secured orders totalling 4.2GW for 2023, with a further 300MW planned for 2024.
On a conference call with analysts yesterday, First Solar chief executive Mark Widmar revealed the company was currently assessing its options for future capacity expansions to cater for the surging demand, stressing that it was working to six-month lead times with its tool and equipment suppliers. This meant that while the company was currently working towards completing the build-out of its new facility in Pettysburg, Ohio, which it broke ground on in August, its next facility would be the one planned for India, with Wimdar stressing that ground works had recently been completed and tool orders now in place.
Beyond that, the company is “thinking through” its next facility, with a location yet to be confirmed. Any new factory would not be realised until 2024, Widmar stressed, with CFO Alex Bradley adding that the company was currently looking into debt options in order to finance any expanded facility.
First Solar did, however, confirm that it had cut its capital expenditure figure for the year, reducing it from a previously planned US$825 – 875 million to a range of US$675 – 725 million.
In addition First Solar confirmed that a planned upgrade of its Vietnam manufacturing base, designed to allow it to produce the company’s Series 6+ modules, had been delayed until Q2 2022 because of issues surrounding COVID-19 lockdowns in the country.
The surge in demand, especially from the US market, comes amidst various trade and regulatory hurdles impacting module availability, coupled with supply chain and logistics issues making shipping modules from Asia into the US both more costly and subject to delays.
First Solar said it shipped 2.1GW of modules in Q3 – a figure which was “modestly below expectations”, Widmar said – however of that figure 820MW remained in transit at the end of the quarter, effectively double that of the preceding four quarters. Further shipping delays are expected into 2022, threatening the company’s gross module margin.
Total net sales for the period stood at US$584 million, with higher revenues from its module segment offset lower systems revenue.