bootstodirt

MEMC Electronic: Glass Half Empty or Half Full?

Interesting view in the article but perhaps we should go farther with the extrapolation idea. One notion is that the impending doom scenario based on polysilicon production from competitors is likely to have similar problems, especially for new companies learning the technology compared to an experienced player like WFR. Although not all use the same technology, there will be manufacturing glitches, so my take is that if WFR can get these resolved now they can ramp faster than the competition.

I am a little confused on the whole margin question, because as I understand it, their margins for solar are higher than for semiconductor sales, and its the semi conductor sales that are the most in flux, so solar should become a larger share and margins go up. The thing that is more concerning is this reset of some large contracts. I think a lot of the big move in the stock was driven by the idea of them locking in long term supply contracts at high prices driven by the shortage. If those are unenforceable, then the profit projections are less secure. Any idea on how much risk there is to more of that action?