Suntech Power Holdings (NYSE: STP) announced it will form a joint venture (JV) with Wuxi Industrial Development Group and Wuxi New District E&D Group to own and operate a 1.2 gigawatts (GW) photovoltaic (PV) cell production facility located at the heart of Suntech’s Wuxi campus in China.
Suntech will own 40% of the JV and will contribute approximately $60 million towards the equity investment.
600MW of the PV cell capacity is expected to be completed by mid-2011. The remaining 600MW will be ramped up in 2011 or 2012 depending on the demand outlook.
Suntech is already the world’s largest PV solar manufacturer by capacity, and this latest announcement is in addition to 1.8 GW the company expects to have online by the end of this year.
Suntech expects to achieve 2.4 GW of installed cell and module production capacity by the end of 2011, of which 600MW of PV cell capacity will be owned and operated by the joint venture. Suntech expects to achieve 1.2GW of installed wafer capacity by the end of 2011.
In November, the company reported 3Q10 revenue of $743.7 million, representing growth of 19.0% sequentially and 57.2% year-over-year.
In October, Suntech opened its first U.S. manufacturing site in Goodyear, Arizona.
New Fiscal Year Guidance
On Monday, Suntech said for the fiscal year ending December 31, 2010, it expects to ship more than 1.5 GW of solar products and generate revenues of $2.78 billion to $2.83 billion, representing year-over-year revenue growth of at least 64%. Consolidated gross margin for the full year 2010 is expected to be approximately 17%. Operating margin for the full year 2010 is expected to be approximately 6.5%.
For the fiscal year ending December 31, 2011, Suntech expects to ship at least 2.2GW of solar products and generate revenues of $3.4 billion to $3.6 billion. Consolidated gross margin for the full year 2011 is expected to be approximately 20% to 22%. Operating margin for the full year 2011 is expected to be in the range of 12% to 14%. Full year 2011 earnings per ADS is expected to be in the range of $1.40 to $1.60.
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