Access to credit hitting GT Advanced Technologies PV customers

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GT Advanced Technologies has reported Q3 2012 revenue of US$110 million, down from US$167.3 million in Q2. PV business remained very weak, impacting sales.

Polysilicon equipment and service sales accounted for around 85% of total revenue (US$96 million) in the quarter. In contrast sales of GTATs DSS furnace products, used in the production of multicrystalline ingots were only US$2 million, compared to a peak of US$240 million in late 2010.

Tom Gutierrez, President and CEO said: “Perhaps the most severe issue facing many of our Asian customers, and one that unexpectedly impacted our third quarter, is the difficulty that many of them are having in accessing credit. With a backdrop of a slowing Chinese economy, many Asian banks with significant balance sheet exposure to solar, are severely limiting access to new credit. The impact of this liquidity crunch has not been limited to solar; rather, it has begun to have a broader impact on nearly all equipment purchases in our served markets in Asia.”

Gutierrez also noted that the company’s PV business remained very weak and echoed recent market research firm, Solarbuzz’s forecast that equipment spending recovery would not occur until late 2013 or into 2014.

As a result, Gutierrez noted that the order pipeline, especially for both multicrystalline and ‘MonoCast’ equipment was limited, leading to the company ‘considering all strategic options with respect to the DSS segment.’ Gutierrez said that regardless of a demand uptick in solar module installations in China, there was plenty of multicrystalline ingot capacity in place.

However, the company executive stressed that the PV market would gradually move away from reliance on multicrystalline wafers as the next generation of high efficiency solar cell technologies evolves onto high-purity monocrystalline wafers.

Backlog and de-bookings

Continuing to have the strongest order backlog, GTAT said that it was not immune to market conditions, having to make a US$56 million negative adjustment in the quarter, bringing the backlog down to US$1.5 billion at the end of Q3.

The backlog included US$618 million of polysilicon, US$141 million of PV and US$718 million of sapphire.

Although management reiterated plans to expand its markets served via acquisitions and technology introductions, market conditions were deemed too difficult to provide Q4 guidance.

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