Taiwan-based Foxconn Technology Group, which is the largest contract manufacturer of electronics, including the iPhone, is building a solar panel plant in China.
After lowering solar cell prices a historic 62% this year, Chinese companies will have a new competitor. “Foxconn plans to build new factories with undreamed-of scale and lower cost,” says Jenny Chase at Bloomberg New Energy Finance. “It will push capacity higher and prices lower.”
Foxconn operates with a 5.6% gross margin on the electronics it produces, making the prospect of a 13% margin for solar quite attractive, even though it’s considered a deathnell by solar manufacturers accustomed to margins double that or more.
When shipments were surging last year, the average margin for low cost Chinese solar suppliers was a healthy 24.6%, according to Bloomberg. Trina Solar (TSL)’s gross margin was 33.2% and Yingli’s (YGE) was 31.5%.