Andrew Ling

First Solar Will Top Estimates Due to Favorable Exchange Rate

Yes, FSLR's labor costs are obviously very low compared to crystaline silicon PV manufactures. This is why they choose to build plants in Germany and Malaysia over lower labor cost locations. The tax advantages offered there must outweigh labor savings. In addition to the increase in profit margin relating to variable cost operations, you also gain an advantage in fixed cost return on assets. In a sense, the assets you paid for and financed in dollars become more valuable when the dollar declines. The gold miners are a good example of this. Their labor costs are probably also increasing very slightly, but as the dollar declines their margins increase across the board.