Following the pattern of consolidations in the solar sector, Panasonic Corp. (NYSE: PC) may be reducing its involvement in the solar sector by cutting production of solar panels and small lithium batteries.
The move comes just shortly after the company built a $564 million solar panel plant in Malaysia, raising capacity to 900 MW, as Reuters reports. But weak European demand and a difficult market may prevent a planned expansion to 1.5 GW.
Korean and Chinese competition, especially for manufacturing, has hurt Panasonic’s fortunes in lithium battery manufacturing.
After having incurred a loss last year, the company was hoping to generate a profit this year by moving production to China. But now officials believe it might still face losses.
The company’s energy unit is having a difficult time trying to hit sales targets of 10 percent of Panasonic’s overall sales. It also still remains well below the operating margin target of 10 percent by 2016.
Panasonic ADR-listed shares fell 8.8 percent on Wednesday morning, but the company posted gains of 4.4 percent by the close of trading in Tokyo.
If Panasonic exits the solar sector, it’ll be another instance of a large corporation bowing out of solar; Siemens recently did something similar.