Solar manufacturer Maxeon Solar Technologies will lay off about 22% of its global workforce as it decided to phase out its Maxeon 6 interdigitated back contact (IBC) modules as well as other operational realignment.
Maxeon CFO Kai Strohbecke said the company’s non-GAAP gross loss is expected to be in the range of US$5 million – US$15 million in the fourth quarter in 2023, including certain idle charges and excess costs related to its IBC capacity pivot potential liquidated damages, because of delivery delays in its utility-scale business as well as the risk of further inventory write-downs.
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The company’s operating expenses are expected to be US$113 million, including restructuring expenses totalling approximately US$70 million for the write-down and accelerated depreciation of certain Maxeon 6 manufacturing assets, charges for Maxeon 7 related purchase orders cancelled at the beginning of Q4, as well as severance costs for the company’s previously announced reduction of 15% in force.
Moreover, Maxeon said its shipments in Q4 will be between 610MW and 650MW, which could be 2.9% lower to 3.5% higher than the shipments of 628MW in Q3 2023.
Strohbecke said the predicted shipments in Q4 will be close to that in Q3, as the company contractually agreed with SunPower to send shipments under a settlement agreement, and expected the growth in its US utility scale volume, offset by a decline in residential business in Europe and relatively flat growth in the commercial and industrial (C&I) sector.
The company also said its capital expenditure (CapEx) will be within the range of US$10 million – US$20 million. In Q3, Maxeon’s CapEx reduced from US$24.2 million in Q2 2023 to US$15.1 million or by 37.4% quarter-on-quarter.
Strohbecke commented: “CapEx came in at US$15 million for Q3 below the low end of our guidance range, as we took actions to execute the lower CapEx plan associated with the introduction of Maxeon 7.”
Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) in Q4 is expected to be in the range of -US$27 million and -US$37 million, down from -US$19.9 million in Q3, due to “lower gross income on largely unchanged non-GAAP operating expenses levels”, which is expected to be US$38 million in Q4, similar to US$37.5 million in Q3.
Maxeon also adjusted its 2023 revenue guidance to US$1.11 billion – US$1.15 billion. Adjusted EBITDA guidance to $4 million to $14 million and our annual CapEx guidance to $66 million to $76 million.
Commenting on the company’s business, CEO Bill Mulligan said: “We are increasingly focused on the favourable landscape for our US utility-scale products. In early October, we announced our plan to build a tunnel oxide passivated contact (TOPCon) pilot line in our Malaysian Fab 3. We believe that this will accelerate and de-risk the ramp of our planned solar cell manufacturing facility in New Mexico, which we have decided to expand from 3-3.5 GW of capacity.”
In addition to the financial results, Maxeon also announced an amendment to its supply agreement and the resolution of disputes between the company and SunPower.
Maxeon will supply modules to SunPower through February 2024 as part of the amended agreement. SunPower will maintain its exclusive right to distribute M-Series products in the US designed by Maxeon until 31 March 2024. Maxeon began as the manufacturing arm of SunPower but was spun off as a separate entity in 2020, although it still operates the SunPower brand in global markets outside the US, Canada and Japan where it trades as Maxeon.
“Maxeon will be released from non-circumvention obligations with respect to SunPower dealers and will receive warrants to purchase SunPower common stock in a private placement, subject to the provisions of the agreement,” the company added.
Lawsuit against Aiko Solar
On 15 November, Maxeon filed patent infringement lawsuits against Shanghai Aiko Solar, its subsidiaries and wholesaler Memodo in Germany.
The lawsuit alleged infringement of Maxeon’s European patent for solar cell architectures. Maxeon said its patent relates to proprietary and fundamental solar cell architectures for rear or back contact solar cells, also known as all-back contact (ABC) solar cells or interdigitated back contact (IBC) solar cells.
Mulligan commented: “The intellectual property behind the IBC technology is the outcome of significant investments and technical advancements and the resultant Maxeon line produces the industry’s most efficient panels. The lawsuit against Aiko and Memodo is necessary to protect our intellectual property, significant R&D and other investments, as well as our reputation and deep heritage and culture of innovation.”
Maxeon also called for Aiko Solar and Memodo to immediately stop unauthorised use of Maxeon’s patented technology.
In a statement, Aiko Solar said the complaint had not yet been served on Aiko Solar, and the company did not know its exact content yet.
“Aiko’s ABC products are fundamentally different from the technology protected by the asserted patent, as has been confirmed by our intellectual property team and our European outside counsel, a renowned IP firm.
In June, Maxeon also filed a patent infringement lawsuit against Chinese PV manufacturer Tongwei Solar in Germany.
The suit concerns Maxeon’s shingled solar cell panel technology – European patent no. EP3522045 B1 – which it claimed Tongwei had infringed on in the German market. The case was filed to the district court in Dusseldorf by Maxeon’s subsidiary Maxeon Solar.
Conference call transcript from Seeking Alpha.
