Motech Industries Inc (茂迪), the nation’s largest solar cell maker, said yesterday it had signed an agreement with GE Energy to buy a solar module assembly operation in Delaware for US$4.54 million.
The deal is part of Motech’s efforts to divert dramatic price erosion. Global makers of solar cells are recovering from a tough year hit by oversupply and the economic recession, which has caused demand to fall and prices to plummet since last year. At the same time, government subsidies for solar installation dropped during the economic slump.
The deal will help the company “enter the US’ end market for solar [panels] on the one hand and on the other hand will help lessen pricing pressure in the competitive solar cell [market],” Motech chief financial executive Norman Shen (沈楨林) said in a statement to the Taiwan Stock Exchange yesterday.
Shares of Motech rallied 5.76 percent yesterday, beating the benchmark TAIEX index’s loss of 0.05 percent.
The deal will also “enhance the company’s deployment in the vertical integration of the solar industry supply chain,” Shen said.
Under the agreement, Motech will be granted the rights to use GE Energy’s module trademark for two years, the company said. In addition, Motech will assume responsibility for providing warranty services to GE Energy’s existing module clients.
Motech is pursuing a vertical integration strategy to enhance its competitiveness. The company has in-house ingot and wafer capabilities and has a major stake in AE Corp, which makes polysilicon, a key raw material for solar wafers.
The GE Energy plant, located in Newark, Delaware, employs 75 people, Motech said in a statement on its Web site.
The transaction is set to close early next month.
Motech has seen four consecutive quarterly losses since the fourth quarter of last year, although its third-quarter losses narrowed 14.1 percent to NT$201 million from the previous quarter.
As of Sept. 30, the firm’s cash and equivalent fell 9 percent to around NT$3.72 billion from NT$4.1 billion a year earlier.