Neo Solar Power upgrades capacity expansion to 360MW

HSINCHU, TAIIWAN: Neo Solar Power Corp., a leading producer of high quality solar cells in Hsingchu, Taiwan, recently presented at its investor conference that it will upgrades its 2010 capacity from 240MWto 600MW, representing a 150% increase from 2009.

Being the most proactive company among peers on expansion, NSP estimates a 400~500MW shipment in 2010, representing a 100~150 percent increase from the 200MW forecasted shipment in 2009. Solar demand is expected to further fuel by the global expectation on energy conservation and greenhouse emission reduction.

For the 360MWexpansion, NSP estimates a total capital expenditure of NT$2.7 billion. The funding shall be fully supported by its internal capital, which is backed by strong cash position of NT$3.5 billion at the end of 3Q09 and about NT$700 million cash inflow from operating activities, which is the highest among Taiwan peers, for the first nine month of 2009. While the expansion is bold and aggressive, the plan is well planned and is ready for execution to fulfill the y-o-y over 50 percent solar demand growth in 2010.

Demand in 2010 are mainly from major markets in Germany, Japan, China, and US. Benefited by new polysilicon ramp-up from global leading manufacturers, such as Wacker and Kemlock, supply surplus for poly-silicon and weakened wafer cost are well expected. Fueled by lower material costs, NSP expects that the prosperous global demand in 2H09 to continue into 2010 and provide mild support to the averaging selling price (ASP) that shall help to stabilize gross margin.

Leveraging manufacturing cost advantage and its strong brand recognition on high cell efficiency and quality, NSP continues deliver growth despite sluggish solar demand in 2009 and NSP’s emphasis on branding shall prepare itself to meet the explosive solar demand growth after the forecasted grid parity in 2012 and further capitalize its global market share.

While the financial tsunami hindered solar demand growth in 1H09, NSP managed to deliver a strong sales rebound in June and reached full utilization in July, ahead of its competitors. Contributed by rising shipment volume and higher cost inventory reduction, NSP returned to profits in 3Q09. Total shipment for 2009 is estimated at 200MW, completely pushing away the cloud hanging over in 1H09.

Moreover, NSP achieved major improvement on rising conversion efficiency and production yield through processing technology advancement in 1H09. Such efforts also led to an upsurge of output and enlarged capacity from 210MWat the beginning of 2009 to current 240MW. Upon ramp-up of 2010 capacity expansion, NSP’s total capacity will surpass 600MW.

As it continues push up shipment scale, NSP aims to step up as global Tier 1 solar manufacturer, not only demonstrating the operating commitment of its management team but also raising entry barrier of new competitors.