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"Asian solar manufacturers eyeing Oregon as refuge from SolarWorld trade fight with China"

SolarWorld’s complaint against China could generate a windfall for Oregon: Asian manufacturers starting solar factories here to gain refuge from a trade war.

"Asian solar manufacturers eyeing Oregon as refuge from SolarWorld trade fight with China"

Some Chinese solar-panel makers plan to move manufacturing abroad if SolarWorld succeeds in getting the U.S. government to put tariffs on their exports to the United States. (Photo by Amy Hsuan/The Oregonian)

By Richard Read
The Oregonian

>>click here to read original article

SolarWorld’s complaint against China could generate a windfall for Oregon: Asian manufacturers starting solar factories here to gain refuge from a trade war.

Managers of solar panel-makers in China told stock analysts Monday they might move some production offshore to avoid anti-dumping tariffs that SolarWorld’s coalition is seeking on Chinese products the company contends are illegally subsidized.

Representatives of one Chinese company have visited Oregon twice and plan to return next month. And a Taiwanese solar manager plans to visit this week, said Ocean Yuan, president of Grape Solar, a Eugene company selling panels and parts.

Additionally, the U.S. manager of a South Korean solar panel-maker plans to tour the former Hynix Semiconductor plant in Eugene on Tuesday to consider buying the empty factory. David Yoo, S-Energy America general manager for business development, said an assembly operation there could employ between 80 and 350 people and could be in production in late 2012.

More solar companies are inquiring about manufacturing in the state, according to the Oregon Business Development Department. Some interest may come from South Korean and Taiwanese companies that could produce U.S.-made solar modules below prices of Chinese panels subject to tariffs if SolarWorld wins its case.

"Without anti-dumping laws, Taiwan and Korea have had a hard time competing with the Chinese,” Yuan said. “Now this is a golden opportunity for them.”

Events have cascaded unpredictably during the six weeks since SolarWorld, a German company with 1,000 workers making solar products in Hillsboro, filed its trade case.

An industry coalition has formed to oppose SolarWorld and its six anonymous industry allies, saying cheap Chinese panels help U.S. installers and consumers. Beijing upped the ante Friday, launching investigations not only of the U.S. solar industry but of wind and hydro trade practices, as well.

The development of competing solar companies eyeing Oregon for assembly operations intrigues local economic development officials.

“We’ve been waiting to see the other foot fall, downstream of the petition for anti-dumping of solar cells,” said Bruce Laird, an Oregon Business Development Department business recruiter. “Who knows where this will all end up.”

To be sure, manufacturers often kick tires in states that compete to attract projects. Yoo, of S-Energy, avoided discussing impacts of the trade fight, saying his company remains neutral. Laird, who will show Yoo around the Hynix plant, says he’s not sure whether recently increased inquiries result from the trade conflict.

Laird had assumed manufacturing inquiries would stall, given plunging cell and panel prices that have caused a global glut amid reduced demand in Europe. Laird, known for protecting identities of companies considering Oregon, said he was dumbfounded an investor would tell a reporter about a prospective deal.

Yoo is based in Irvine, Calif., at the U.S. branch of S-Energy, a 2001 spin-off of Samsung, the Korean electronics giant. With $210 million in sales last year, it employs 450 making solar panels in a factory near Seoul.

Yoo sees the United States as a growing market where solar power could reach parity fairly soon with conventional electricity prices, notably in Sun Belt states. He’s visiting a number of states to find a site for S-Energy’s first overseas plant, but he sees some advantages in Oregon.

Oregon has a deep pool of workers trained in the semiconductor industry, Yoo said. It’s close to California, the major solar market, making panel shipments economical. And Oregon offers tax credits to qualifying solar manufacturers, while other states provide property-tax abatements and low-cost land.

Yoo would like to be able to place Made in USA labels on S-Energy panels. More Korean suppliers are establishing U.S. operations, he said. The U.S.-Korea Free Trade Agreement adds certainty to material imports.

China has done well without U.S. manufacturing, Yoo said. “But there is a political cost,” he said, “which currently they’re suffering through that trade action.”

Executives of China’s LDK Solar Co. and JA Solar Holdings Co. told analysts during conference calls Monday they might move some manufacturing to other countries if the United States imposes duties.

SolarWorld managers have said they would welcome U.S. manufacturing by Chinese companies, given that laws here would ensure fair competition. But they wouldn’t welcome an influx of final-assembly factories, known derisively as screwdriver plants, established merely for token U.S. manufacturing status.

At least initially, Yoo said, S-Energy would make only panels — not the silicon ingots, wafers and cells that go into them — in the U.S. because that’s S-Energy’s specialty.

Eugene officials would welcome renewed activity at the Hynix plant, where 1,300 workers made memory chips before the South Korean company closed it in 2008. A 2009 deal, also by a South Korean company, fell through to convert the plant to a solar factory. That company planned to buy the 1.2-million-square-foot plant for $50 million, a fraction of its $252 million cost in 1998.

The plant’s price has likely fallen since then. The real estate agency says only that Hynix is open to offers.

 
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