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Looking To Rebound: Suntech Reduces Solar Production Capacity

September 17, 2012

As the solar industry continues to combat lower demand and shrinking profits, Suntech Power (STP :NYSE) had announced it will reduce solar cell  to  1.8 gigawatts (GW). Suntech’s module capacity will still be 2.4 GW and wafer capacity will continue to be 1.6 GW.

Reducing production capacity isn’t a new to the solar industry as First Solar (FSLR :NASDAQ) and SunPower (SPWR :NASDAQ) reduced their output earlier in the year.

Suntech will reduce capacity at its Wuxi plant that will affect approximately 1,500 positions.

Today’s move is part of Suntech’s plan to reduce operating costs by 20 percent in 2012. Suntech expects to be operating in positive cash flow in 2013.

For investors, it appears like Suntech is making the correct moves to support its goal.

Shares of Suntech were up 5.75 percent in afternoon trading.

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