SunPower to spin off manufacturing operations

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
SunPower Corp is to spin-off most of its manufacturing operations into a separate public listed entity, Maxeon Solar, which will include monocrystalline silicon wafer producer, Tianjin Zhonghuan Semiconductor (TZS) as an investor. Image: SunPower

Updated: US-headquartered high-efficiency solar panel manufacturer SunPower Corp is to spin off most of its manufacturing operations into a separate public listed entity, Maxeon Solar, which will include monocrystalline silicon wafer producer, Tianjin Zhonghuan Semiconductor (TZS) as an investor.

SunPower had been seeking a partner to invest in expanding production of it’s NGT solar cells at its manufacturing plant in Malaysia, which had two production lines with a capacity of only 250MW. The NGT cells, which use larger n-type mono wafers produced by TZS are used in SunPower’s highest performance rated PV modules, the A Series. A TZS subsidiary provides over 2GW of module assembly capacity to SunPower through its P-Series (p-Type mono PERC) modules.  

SunPower’s Board has approved the spin-off and an equity investment of US$298 million from TZS, which would give the China-based firm around a 28.8% initial stake in Maxeon Solar. Around 71.1% ownership will be held by SunPower shareholders. The deal is expected to be completed and funds provided by TZS in the second quarter of 2020.

Jeff Waters, currently chief executive officer of SunPower's Technologies business unit, has been named Maxeon Solar's CEO. SunPower said that Maxeon Solar had been incorporated and would be headquartered in Singapore and its ordinary shares are expected to be traded on NASDAQ.

SunPower will only retain the P-Series module assembly operations at its facility in Oregon and focus on its downstream residential and commercial businesses. 
Tom Werner, president and CEO of SunPower will remain in his post. 

“We believe that the solar industry is entering a period of extended growth where success will be driven by value chain specialization, technology innovation and economies of scale,” noted Werner. “This new structure and investment will create two focused businesses, each with unique expertise to excel in their part of the value chain.”

Haoping Shen, chairman and general manager of TZS said, “In the past eight years, TZS and SunPower have established a great and long-term partnership and the rapid scale-up of Performance Series technology to multi-gigawatt capacity has already demonstrated the power and synergy of our cooperation. “We share with Total the consensus on business philosophy and are happy to become a shareholder of Maxeon Solar Technologies and look forward to supporting the scale-up of Maxeon technologies and the deployment of future technology innovations.”

“During the last years, SunPower has successfully adapted the company and its products in a challenging global solar market,” said Patrick Pouyanné, Total CEO. “As the main shareholder of Sunpower, we support this transaction which will bring clarity and focus for both entities on their respective activities. We welcome TZS as partner in Maxeon Solar Technologies which will be able to further develop its highly differentiated PV technology platforms and SunPower will focus on developing its leadership position in distributed generation in Northern America. Total intends to remain shareholder of both Sunpower and Maxeon Solar Technologies.”

SunPower has struggled to return to sustainable profitability in recent years and has undergone a number of restructuring phases but was not expected to return to GAAP profitability in 2019. 

As of September 29, 2019, Total's shareholding in SunPower was 55.0981%.

TZS would become the second largest shareholder in Maxeon Solar Technologies Ltd, which will be headquartered in Singapore.

Separately, TZS said it had hired Morgan Stanley Asia Limited, PricewaterhouseCoopers Consulting (Shenzhen) Co., Ltd., Weijia International Law Division, King & Wood Law Firm and Fraunhofer Institute for Solar Energy Systems ISE,  as a consultant for the transaction.

The investment by TZS was said to advance the manufacturing capacity of Maxeon-5 solar cell production and the development of Maxeon-6 cell R&D, while accelerating the conversion of Maxeon-2 capacity to higher efficiency and lower cost Maxeon-5 technology.

TZS will gain from overseas manufacturing operations in Malaysia, Mexico and France and the ability to sell PV modules outside North America.

Ramping Capacity Across Both Product Platforms. Image: SunPower Corp

The PV manufacturing exclusivity was said to last for 2 years with SunPower. 

Maxeon Solar is not expected to make a GAAP net profit through 2020 as the new company is expected to carry new debt funding. 

Around US$300 million in capital expenditure is expected to allocated to converting Fab 3 in Malaysia from SunPower’s legacy E-Series IBC cell technology (Maxeon 2) to NGT (Maxeon 5) cell technology, which would be give Fab 3 a nameplate capacity of 1.7GW. 

Maxeon Solar was forecasted to incur a GAAP net loss of US$78 million in 2019, followed by a GAAP net loss of US$72 million in 2020. The loss was also attributed to SunPower’s long-term polysilicon supply deal with Hemlock Semiconductor at highly uncompetitive pricing. 

Maxeon Solar is expected to make a loss of US$139 million on the polysilicon supply deal in 2019, followed by a loss on the deal of US$111 million in 2020. 

Read Next

August 23, 2021
Singapore’s national water agency PUB is considering the installation of two floating solar projects with a combined capacity of 144MWp as part of efforts to utilise the city-state’s reservoirs for renewables generation.
PV Tech Premium
July 14, 2021
Reforms in energy policy since the election of Andrés Manuel López Obrador have led to increased uncertainty for solar developers in Mexico, with renewables auctions cancelled and changes to power dispatch priorities proposed. Alice Grundy looks at how the market can move forward once again.
July 7, 2021
A 60MW floating solar project installed on a reservoir in Singapore has been connected to the grid and is now in commercial operation.
July 7, 2021
The proven ability to install large-scale floating PV plants on water bodies across Southeast Asia means financing should be readily available for new projects, it was suggested during a panel discussion today.
June 17, 2021
Shell has signed a memorandum of understanding (MOU) with Singaporean development agency JTC to explore the development of a new solar farm on the Semakau landfill to the south of Singapore.
June 14, 2021
Asia boasts a growing number of markets with solar development pipelines in excess of 1GW, a new report by Fitch has found, with the region dominating the consultancy’s project database analysis this year.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
BRISTOL, UK
Solar Media Events
December 1, 2021