Solar manufacturer Maxeon Solar Technologies’ shipments in the third quarter could drop by about 23% quarter-on-quarter to only 622MW due to reduced shipments to a US customer and a drop in demand in the global distributed generation (DG) market.
The company said in its Q3 preliminary results that its shipments in Q3 2023 would be in the range of 622-632MW, down from 807MW in Q2 2023, representing a decrease of up to 22.9%. Maxeon CEO Bill Mulligan said the company’s largest US distributed generation (DG) customer, without naming the identity of the company, had breached their payment obligations under a current master supply agreement. Therefore, Maxeon paused shipments in late July as a result.
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Speaking of this customer, Mulligan added, “While this customer has recently made several payments on their outstanding balance and is now close to becoming current, we continue to pause our shipments and engage in good faith towards resolution of certain ongoing claims of breach under the master supply agreement. We do not have visibility into how quickly such resolution can be achieved. It is our position that we have firm quantity and pricing contracts in place.”
The company said its Q3 revenue would be in the range of US$224-US$229 million, dropping from US$348.4 million in Q2, representing a 35.7% decrease. Adjusted EBITDA in Q3 would be about US$30 million, similar to the amount of US$30.2 million in Q2.
Due to the latest market situation, Maxeon will lay off 15% of its global workforce with most of the reductions expected to occur by the end of the year.
Additionally, Maxeon also announced a plan to “re-engineer” its interdigitated back contact (IBC) manufacturing capacity.
“Instead of refurbishing our Fab 5 facility in the Philippines, which we now plan to utilise for the scale-up of our next-generation Maxeon 8 technology, we will convert our legacy Maxeon 3 capacity in the Philippines to Maxeon 7 technology. This will allow us to accelerate the market introduction of world-record efficiency Maxeon 7 panels by several months and reduce capital expenditures by about US$100 million,” said Mulligan.
In September, Maxeon acquired selected assets from California-headquartered solar company Complete Solaria. Moving forward, Maxeon intends to not only accelerate its IBC product sales through its own Maxeon-branded in the US, but also to enable the introduction of a value offering complementary to its premium IBC product.
Moreover, Maxeon will begin the preparation of its Fab 3 facility in Malaysia to install a tunnel oxide passivated contact (TOPCon) solar cell pilot line ahead of the start-up of its planned manufacturing facility in Albuquerque, New Mexico.
“As a result of rapidly changing market and industry conditions, we have acted decisively to streamline our operations, invest in new technology, and adjust our mix between the DG and utility-scale markets. The current industry disruption provides an opportunity to re-engineer and rebalance our technology portfolio,” said Mulligan.