Hanwha cuts domestic solar module production, expands in US

The Korea Times

The Korea Times

Business

Wed, December 6, 2023 | 13:48

Hanwha cuts domestic solar module production, expands in US

Posted : 2023-09-11 16:29

Updated : 2023-09-12 15:55

Hanwha Solutions Q Cells Division's plant in Jincheon, North Chungcheong Province / Courtesy of Hanwha Solutions

By Park Jae-hyuk

Diminishing demand for solar power generation in Korea has prompted Hanwha to downsize domestic production of solar modules and accelerate its expansion in the profitable U.S. market, according to industry officials, Monday.

Hanwha Solutions Q Cells Division, the solar module manufacturing unit of Hanwha Group, said it cut production recently at its solar module factory in Eumseong, North Chungcheong Province, although it has yet to decide whether to reduce output further or deploy the factory workers to its plant in nearby Jincheon.

"The decision can be attributed to the decreasing solar module sales and installation rate in Korea since last year," an industry official said on condition of anonymity.

Amid the Yoon Suk Yeol administration's negative stance on the solar power industry, Hanwha Q Cells' domestic revenue during the first half of this year fell to 122.7 billion won ($92 million) from 283.8 billion won a year earlier.

Its domestic revenue is expected to decline further, considering that the proposed budget for the renewable energy industry next year stands at 605.4 billion won, down 42.3 percent from this year's budget.

In addition, the surplus of Chinese solar modules has weighed on Hanwha Q Cells.

As a result, Hanwha Solutions told securities analysts last Tuesday that its third-quarter operating profit will be halved from the second-quarter operating profit of 194 billion won.

"High-priced wafers may affect the profitability of solar module production until the end of the third quarter," Kiwoom Securities analyst Chung Kyung-hee said.

Samsung Securities also lowered Hanwha Solutions' stock price target to 49,000 won, down 8 percent from 53,000 won.

Such a negative outlook dragged down the company's stock price to a 52-week low of 33,050 won during Monday's intraday trading session. Its stock price closed at 33,250 won, down 0.45 percent from the previous session's close.

Hanwha Solutions Q Cells Division's plant in the U.S. state of Georgia / Courtesy of Hanwha Solutions

In order to offset the sluggish performance in the local market, Hanwha Solutions is struggling to sell more products in the U.S. and overseas markets.

During the first half, its exports rose to 1.38 trillion won from 907 billion won.

The solar module manufacturer also started the operation of its new Dalton plant in the U.S. state of Georgia four months earlier than planned.

"The U.S. Department of Commerce decided to impose anti-dumping tariffs on Chinese solar modules imported from Southeast Asia," Hyundai Motor Securities analyst Kang Dong-jin said. "In the medium to long term, Hanwha Solutions will solidify its status in the U.S. market."

pjh@koreatimes.co.kr