All information provided on this call is as of today's date, unless otherwise stated, and Canadian Solar undertakes no duty to update such information except as required under applicable law.

At this time, I would like to now turn the call over to Dr. Shawn Qu. Please go ahead, sir.

Shawn Qu

Thanks, David, and thank you, all, for joining us on today's call. With a backdrop of a challenging solar industry environment, we are pleased with our results for the quarter at 412 megawatts. Our shipments came in close to our expectations, while gross margin on a GAAP basis came in above our guidance. Demand strength in Europe was offset by somehow slow sales in North America, while we are still waiting for the demand surge expected in other markets such as China and Japan.

The key theme for Canadian Solar in the second quarter remains a solid execution at all levels of our organization. We continued to execute on all the key components of our strategy. Specifically, we are focused on increasing our market share and gaining scale, reducing our costs, expanding our higher-margin total solution business and enhancing our product offering by launching innovative, high-efficiency modules.

In the second quarter, we believe we gained market share over other competitors while expanding our customer base and geographic footprint. We are consolidating our position on our worldwide top 4 suppliers, making Canadian Solar the partner of choice across all key geographies. In addition, we are executing the -- we are exiting the second quarter with one of the strongest balance sheets in the solar industry, positioning Canadian Solar to benefit from the global flight to quality and bankability and to emerge from the current cycle as a stronger leader.

On the manufacturing front, we continued our relentless focus on the reduction of our all-in module manufacturing costs, which reached $0.67 per watt, down from $0.73 per watt in the first quarter. Progress of our cost roadmap was driven by continued improvement across all the staff in the production process. The $0.06 per watt cost reduction from Q1 to Q2 is roughly equally shared by reduction in the cost of silicon wafer and the cost of cellular module processing in our own factory. We believe we are now among the lowest cost suppliers in the world, and we are within reach of our industry-leading OEM module manufacturing cost target below $0.60 per watt by the end of 2012.

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