JA Solar (JASO) More Than Doubles Internal Wafer Capacity With Silver Age Acquisition

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09:36:58 am on July 1, 2011

JA Solar (JASO) continues to find ways to expand capacity.  You might remember that back in February the company announced a 3 year, $2 billion expansion plan.  This morning the company announced an acquisition of Virgin Islands based Silver Age Holdings for $180 million in stock.  Silver Age owns a leading solar wafer producer in China with an annual solar wafer capacity of 485MW.  The company also produces quartz crucibles which is a key material used in solar manufacturing.  JA Solar is quite familiar with Silver Age considering its Chairmen owned 70% of the company.  The acquisition more than doubles JASO’s internal wafer capacity which will allow the company to reduce the cost to make solar cells.

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"This agreement represents another important step in JA Solar’s strategy of optimizing our cost structure through selective vertical integration," Dr. Fang Peng, CEO of JA Solar, commented. "In today’s solar market, it is essential for producers to improve costs while maintaining a relentless focus on technology and product quality. By boosting JA Solar’s internal wafer capacity through this acquisition, we expect to achieve greater economies of scale and improve the company’s profitability. Furthermore, Solar Silicon Valley has key technologies which can be leveraged to provide superior quality wafer substrates for our high-efficiency solar cell products. As a low cost leader in the solar industry, we expect that this transaction will enhance JA Solar’s leadership position and enable us to meet strong global demand for our high-quality, high-efficiency solar products."

Shares of JASO are moving just a bit lower on the news and continue a long downtrend.  While shares may soon offer a compelling long term entry point, it’s a bit too soon to jump into shares here.

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