Trina Solar: Still Struggling to Bring Manufacturing Costs in Line With Falling Prices
Jifan Gao, chairman and chief executive of Trina Solar, told analysts on the solar panel maker’s second-quarter earnings call that he believed market confidence was returning to the photovoltaic sector and expected gross margin to stabilize going forward. Critical to Gao’s optimistic modeling, however, are certain assumptions on the vertically integrated solar company’s cost structure. In particular, profitability into 2010 and beyond remains dependent on an actual turnaround in demand and management’s ability to cut manufacturing costs. Gross margin in the quarter improved 420 basis points year-over-year to 27.4 percent, due primarily to a 30 percent drop in average silicon material purchase prices. Polysilicon, currently priced at about $70 per kilogram on the spot market, is expected to bottom in…
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