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Panasonic Sanyo to halt solar panel expansion as $10 billion Loss sinks stock to 1975 Low

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Panasonic halts Solar Panel Expansion

Panasonic the iconic Japanese conglomerate which manufactures a mind boggling variety of products is facing the same fate as that of Sharp. Note Sharp which is amongst the top 5 global producer of solar panels announced a massive cutback of its solar manufacturing and retreat from Europe. This was done after the very survival of Sharp was being questioned due to its massive losses. Note Japanese conglomerates have been losing huge amounts of money as they lose market share and revenues to Korean and Chinese companies. These companies have failed to innovate like American companies eg. Apple and have been mired in red for the last 4-5 years. These companies now have to restructure radically in order to survive. Panasonic which bought Sanyo Solar a year ago is also in the process of a big restructuring to cut costs and divest low return assets.

Panasonic has already announced that its new solar panel plant in Malaysia will not go ahead with expansion. Note producing PV panels in Japan is no longer profitable and it is doubtful how competitive these Japanese module makers will be producing outside of Japan. Note the massive Chinese overcapacity has already resulted in bankruptcy of hundreds of solar companies and exit of many Japanese companies like Sumco, JFE Steel from the solar supply chain. It won’t be long before most of the other Japanese solar manufacturers too call it a day.

There have been hundreds of solar bankruptcies in the last couple of years as solar panel prices have gone down by almost 65% and ASPs have approached the COGs of the lowest cost solar panel manufacturers. However the big Japanese solar panel manufacturers have remained insulated from this wave of failures as they are in general big conglomerates with diversified business lines. While some of the South Korean conglomerates like Samsung, Hyundai have curtailed their solar panel expansion plans, there is no fear of bankruptcy.

However Sharp which is Japan’s largest solar panel manufacturer is facing a real fear of failure as its stock price has crashed to a 37 year low as its cash flow position become precarious. Japanese electronic conglomerates like Sony, Sharp, Panasonic have continuously lost market share to South Korean and American companies like Samsung and Apple. They have been plodding along with wafer thin margins for a long time however the last couple of years have been brutal. A strong Yen and competition have forced them into huge losses. In fact Sharp is facing a major equity draw-down because of the huge loss it is making. Sharp has been losing money in its major bread and butter business lines like flat panel displays and solar panels. The company which invested a massive amount of money into building a state of art technology plant in Sakai is having difficulty in funding itself. The company is looking at Foxconn (an OEM supplier) for funds as it continues to lose money. While the other major business groups like Sony too are losing money, Sharp has reached pretty much the end of the tether.

Sumco exit from Solar Energy

Sumco which is the 2nd biggest producer of semiconductor wafers is closing down its solar wafer division after  reporting a massive loss in 2011. The company will close 2 of its solar wafer divisions and shed more than 1000 jobs. Many of the Western companies like REC, Schott have already closed their solar wafer divisions due to a 70% reduction in solar wafer price in 2011. Only big Solar Wafer Producers like GCL , Renesola can be expected to survive the biggest down cycle in the solar industry.

A couple of hours later, he warned investors in Tokyo that Panasonic would lose close to $10 billion in the year to March as it writes down assets and restructures – taking cumulative losses at the 94-year-old firm to nearly $25 billion in five years. Tsuga branded the maker of Viera TVs a “loser” in consumer electronics.Panasonic shares, already bumping along at multi-decade lows, slumped by almost a fifth on the huge loss forecast, wiping $3 billion off its market value and prompting Standard & Poor’s to cut its credit rating to close to junk. On Tuesday, the stock touched its lowest since early 1975 – when Tsuga was still at college.

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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