User 137279

Why LDK Beats First Solar

FSLR mgt is NOT DUMB. They have stock piled Tellerium for the last couple years and have plenty and are sourcing everyday. LDK is shady and not trust worthy. More importantly, their polysilicon plant will not produce enough poly in the near term to make a big impact on costs and in fact, costs associated with ramping and debottelnecking will likely outweight any near term benefits. It will take them 2 years before they perfect the process (TCS gas - a poly input - is very hard to make, is very dangerous and requires a lot of expertise). They will have higher costs than that of WFR and will by the time they get the plant online, they will not be able to enjoy the current lofty prices as other producers will already have begun production as well and margins will likely get marginalized. Plus, the current poly market has risen from the lofty first half 2007 prices of ~$350/kg to around or even over $400/kg in the second half of 2007 and into 08. This will squeeze LDK's 4Q margins, and likely 08 margins as well as no new capacity is slated to come online until at least mid 08 (likely having a minimal impact on prices as ALL of it is already accounted for in long term contracts --- something many neglect to mention in their oversupply cries). FSLR has a defensible position in that its proprietary "Copy Smart" production process allows for rapid expansion to meet the needs of UTILITIES (NOT small sized roofs as implied above) in a rapid deployment fashion. Hey pal...what happened to your Cadmium complaints?? That point is misteriously missing from this report.