GT Solar expects continued revenue growth as polysilicon projects roll-out

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Despite the current slowdown in PV manufacturers capacity expansion plans, GT Solar International, Inc. still expects to see revenue growth in 2009. In releasing fiscal fourth quarter and FY2009 results, the furnace and CVD reactor specialist, guided revenues for FY2010 to be in the range of US$450 million to US$550 million, compared to FY2009 record revenues of US$451 million.

“Against the backdrop of the macroeconomic downturn, we saw slower spending by customers in our PV equipment business in the second half of our fiscal year, a trend that is continuing in fiscal 2010,” noted Tom Zarrella, President and CEO of GT Solar International. “In our polysilicon business, we expect to ship a significant portion of our reactor-based backlog over the next few months and recognize revenue later in fiscal year 2010. We are encouraged that many of our polysilicon customers continue to execute their projects in anticipation of the promising long-term future growth of solar.”

However, with a significant slowdown due to the global financial crisis, the vast majority of PV manufacturers have curtailed capacity expansions, limiting the need for new ingot capacity.

At the end of the first quarter, GT Solar’s backlog had fallen from US$1.3 billion to US$1.18 billion. However, the polysilicon segment of its backlog stood at US$836 million, while the PV segment was US$341 million.

GT Solar’s bookings for the year came in at US$411.0 million of which US$137.0 million was from the PV segment and US$274.0 million from polysilicon producers, primarily for CVD reactors.

With CVD equipment lead times of between 6 and 9 months, last years bookings from a range of new entrants in the polysilicon arena are now being delivered, boosting revenue over last year.

However, new bookings are declining as PV manufacturers pause capacity expansions and preserve cash and new polysilicon entrants complete initial ramps but are generally putting on hold further planned expansions. The major polysilicon producers, such as Hemlock, Wacker, REC, MEMC amongst others, develop and install their own equipment and technology, GT Solar’s polysilicon business comes primarily from new entrants such as LDK, DC Chemical and Shunda, for example.

The polysilicon market that has seen spot prices fall below US$70 per Kg compared to US$400 per Kg in mid-2008, forcing many new entrants to focus on cost reductions rather than further expansions, reducing GT Solar’s new bookings stream for the near-term.

GT Solar reported record revenue of US$541 million for the year, yet the mid-point of its previous guidance late last year was US$615 million, indicating that expected orders slowed or were delayed as well as potential push-outs in planned shipments.

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