Hanwha SolarOne shifting away from ‘plain vanilla’ module production

Facebook
Twitter
LinkedIn
Reddit
Email

Third-quarter results from Hanwha SolarOne echoed pricing pressure and weak demand – especially from Germany – that led to margin pressure, inventory write-downs and losses. Hanwha SolarOne reported US$225.4 million in revenue, a decrease of 20.1% from 2Q11 when revenue reached US$277.1 million. The company recorded a non-cash inventory write-down of US$30.6 million and a net loss of US$46.4 million.

Management noted in a conference call to discuss quarterly results that market conditions had forced the company to take several key actions to limit losses and preserve cash. A reduction in manufacturing capacity had been put into action, which would include a workforce reduction through natural attrition.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

Hanwha SolarOne will also reduce 2012 capital expenditure and focus spending on the retro-fit of certain lines to improve cell efficiencies while putting on hold planned capacity expansions, according to Sungsoo Lee, chief strategy officer and board secretary at Hanwha SolarOne.

Lee described the focus on higher performance cell production as a transition away from “'plain vanilla’ PV crystalline modules with little differentiation.”

“We believe going forward, it will be necessary to take a more systems view of our product incorporating additional components such as inverters, batteries and systems management and capturing some of the profit potential further down the value chain,” added Lee.

Part of this new strategy included partnerships with Zep Solar on mounting systems and integrated microinverters with Enphase.

Sales in the third quarter were impacted by weaker than expected demand in Germany, which has proved to be Hanwha’s strongest market. In the quarter, Germany made up 45% of total shipments an increase of 21% over the last quarter.

The importance of China as a new emerging market was also emphasized as shipments increased from 4.4% in Q2 to 7% in Q3.

Hanwha management noted that sales increased in India (5%) and Korea (2%), largely as a result of higher demand triggered by new government incentives.

Manufacturing cost reduction

Hanwha reported that the average polysilicon cost for the third quarter fell to US$56.5 per kilogram falling from an average of US$74 kilogram in the previous quarter. Management noted that it expected polysilicon pricing to decline in the first quarter in the range of US$30 to US$35/kg.

Production costs using internal wafers and cells fell from US$1.32 to US$1.13. The fall in the price of polysilicon and continued cost reduction initiatives were said to be responsible for the improvements. Hanwha said that in September its in-house costs were about US$1.10 with US$0.33 for silicon and US$0.77 for non-silicon.

Hanwha reported non-poly processing cost for a standard multi module had reached US$0.74 a watt by the third quarter’s end. However, lower utilization levels would negatively impact cost reduction gains.

Cost reduction plans included material consumption reduction and replacement on better pricing as well as targeting lower wafer/cell breakage rates and focus on higher cell and module output. The company also noted efforts targeted at more efficient uses of slurries, wire saws and silicon blending.

On the subject of higher cell efficiencies, management noted that the company was moving forward to meeting cell efficiency goals of 19% on monocrystalline wafers and mid-17% conversion efficiencies for multicrystalline wafers by the year end of 2012.

Guidance

Hanwha noted in the call that it had previously expected full-year shipments to reach 1GW, however due to the change in market dynamics, 655MW had been shipped in the first nine months and therefore continued weak demand meant it had revised down its shipment guidance to between 815MW and 835MW. Fourth-quarter shipments were therefore guided to be between 160MW and 180MW. 

Read Next

September 11, 2025
US cell manufacturer ES Foundry is proceeding with expansion plans despite a six-month delay due to recent trade and tax credit policy uncertainties.
September 11, 2025
The absence of negative pricing in Italy undermines the case for co-located solar storage, the co-founder of Italian IPP Terrawatt has said.
September 11, 2025
Solar power generation in Central Europe has grown at more than twice the EU average rate since 2019, according to new figures.
Premium
September 11, 2025
PV CellTech USA: US cell manufacturer ES Foundry’s CEO Alex Zhu discusses his company's rapid ascent, strategic technology choices and the challenges of operating in a shifting policy environment.
September 10, 2025
At RE+ 2025, companies launched AI-driven platforms, terrain-following trackers, low-carbon modules, and advanced energy management solutions for solar and storage.
Premium
September 10, 2025
PV Talk: Italy’s new CfD policy offers clear support for solar developers in an otherwise uncertain legislative landscape, says Terrawatt's Patrizio Donati.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK
Solar Media Events
October 2, 2025
London,UK
Solar Media Events
October 7, 2025
Manila, Philippines