re SOL:
I don't like SOL for the same reasons I don't like LDK.
All the big cell producers are already, or in the process, of becoming vertically integrated. They want to make their own wafers. The industry has decided that low manufacturing costs require vertical integration. SOL is way behind others, in achieving vertical integration.
SOL's high debt, by itself, would be a reason for me not to invest in them. As overcapacity within the industry increases through 2011, margins will get compressed for everyone. This, combined with the Chinese government's decision to increase interest rates and tighten lending standards, is going to cause big problems for all the high-debt solars.
SOL, like LDK, is mainly a wafer producer. Nobody makes much money selling a commodity, and I think wafers are a commodity. The part of the process, from polysilicon to systems, that is least likely to be a commodity, is cell production. The other non-commodity area is equipment production, like AMAT does. |
