NEW YORK (TheStreet) -- LDK Solar (LDK) is planning to build a solar manufacturing facility with 1 gigawatt of solar cell and 500 megawatts of solar module capacity. The manufacturing facility is expected to begin production in the second quarter of 2011, backed by $368 million in financing for up to three years from a Chinese lender.
Many of LDK Solar's Chinese peers are ramping up capacity and moving to a more vertically integrated model. Therefore, it's not a surprise that solar wafer maker LDK would be looking to branch out on the solar supply chain. However, LDK's plans are complicated by three factors: 1) its ongoing polysilicon plant ramp, 2) its balance sheet issues, and 3) potential oversupply in solar.
LDK just came off a solid second quarter, during which the Chinese solar wafer maker improved its balance sheet to an extent that LDK hadn't been able to achieve in the past two years.
(JASO) moving into solar modules, a solar module leader like Yingli Green Energy (YGE) moving into polysilicon production, or a relatively new entrant like Jinko Solar (JKS) moving out from polysilicon production to all aspects of the solar supply chain.
LDK purchased a solar module maker earlier in the year, and signaled at its last analyst meeting that it would be looking to further vertically integrate. With polysilicon production at one end, wafers in the middle and solar cell and module production at the other, LDK would be in a position to achieve cost efficiencies across the solar supply chain.
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