Q-Cells SE posted record sales and cell production for its full year 2008 financial results, retaining its position as the largest solar cell manufacturer. The company reached production volume in its core crystalline business of 570.4 MWp, slightly lower than the previous guidance of 580MWp but a 48% increase over 2007 levels. Sales grew by 46% to €1,251.3 million, compared to €858.9 million in 2007. Q-Cells expects to ramp both c-Si and thin-film capacity in 2009 to between 1.3GW – 1.4GW and 200MW – 250MW levels, respectively. Capital spending for 2009 will be within the range of €400 million to €500 million, dependent on market demand, the company said.
However, the core of the planned expansions come from existing investments made in 2008 in new plants in Malaysia for c-Si cell production and the initial plant ramps at thin film-subsidiaries, primarily at Solibro, Sontor and Calyxo. The company noted that the sixth production line at the Bitterfeld-Wolfen site was commissioned in the fourth quarter of 2008, allowing total cell capacity to be increased to 760MWp at year-end.
Phase I of the new fab in Malaysia is now completed and expected to start ramping in the second quarter of 2008. However, Q-Cells executives noted in a conference call with financial analysts that Phase II ramp would be pushed out and ramp would be governed by market demand.
Two of the thin-film subsidiaries started mass production in 2008, Q-Cells said. Sontor GmbH is expected to ramp its 25MW plant in 2009, while Solibro GmbH will expand capacity to 135MWp by year-end (current capacity is 30MW). Anton Milner, Q-Cells’ CEO, noted in the call that Solibro ramp had been highly successful and was possibly the fastest ramp experienced in the PV industry.
Combined nominal capacity is expected to reach 1.7GW in 2009; however, Q-Cells cautioned throughout the call that it would be operating a ‘flexible’ manufacturing strategy in 2009 due to the expected softness in market demand that will run through the first half of 2009, and the lack of clear visibility in the second half of the year and into 2010.
Q-Cells has cell supply contracts for 2009 of between 850MW and 970MW that includes ‘delivery risk’ and options +/-10%. Production targets for c-Si cells were projected to be in the range of 800MW and 1GW in 2009, roughly in line with guidance previously given.
Milner expressed his delight at the abundance of polysilicon and subsequent low prices that could be present for several years ahead. Due to the rapid fall in polysilicon prices, he noted that pre-payments on polysilicon supply contracts with producers was a “thing of the past,” as increasing levels of the material were coming online, negating the need to lock-in supply and pre-pay a percentage amount.
He also commented that pre-payments were never something they nor the industry wanted to do. Now that prices will remain low for the foreseeable future, he hoped the incumbent polysilicon producers, which had been too conservative in the past with capacity expansions had “learnt a brutal lesson.”
Milner also acknowledged that previous plans to aggressively ramp UMG silicon usage had now taken a backward step due to the quality and lower priced polysilicon but remains committed to its adoption over time. He also expected UMG capacity at suppliers to slow, making smaller volumes available to allow for the fact that new investments will be difficult to make in the current financial climate.
With this in mind, Q-Cells gave a wide range to expected revenue in 2009. The worst-case scenario would see sales reach approximately €1.7 billion, with the top-end of expectations coming in at €2.1 billion for 2009.