Sanyo Electric Co., Ltd., a wholly-owned subsidiary of Osaka, Japan-based Panasonic (News - Alert) Corp., has revealed that it will close its Carson City, California-based factory – Sanyo Solar (U.S.A.) L.L.C. – next October.

The company outlined its plans in an interview with Forbes Contributor Ucilia Wang. The plant, at which Sanyo (News - Alert) has been manufacturing the solar cell components since 2003, will halt production at the end of the company’s fiscal year in March – laying off 140 local workers in the process. It will close its doors for the final time seven months later, after liquidating all assets.

Aaron Fowles, a spokesperson for Sanyo, said that shuttering the plant was part of the company’s overall strategy for competition with China. The plant’s infrastructure would have needed a prohibitively expensive retrofit soon, he said, noting, “The Carson plant has no room for expansion, and it will take a vast amount of investments to bring it up to speed. To be competitive, we can do it in Malaysia.”

Pieces of the Solar Strategic Puzzle

Malaysia has become an integral part of the new Panasonic-Sanyo solar strategy. Just last November, Panasonic announced that it had broken ground on a 750,000-square-foot solar manufacturing facility – Panasonic Energy Malaysia Sdn. Bhd – in Kulim Hi-Tech Park, Kedah, Malaysia , at an estimated cost of US$584 million. The plant, which will employ 1,500 workers, is scheduled to open at the beginning of the new fiscal year in April 2012, coinciding with the closure of the California unit. It will have an annual production capacity of 300 megawatts (MW).

Then, in December 2011, Sanyo North America Corp. announced that, as of April 1, 2012, the branding of its HIT solar modules will change from “Sanyo” to “Panasonic.” Unifying the solar brand is part of a wider scheme of consolidation of brands of certain products currently being carried out by the Panasonic Group in order to take advantage of the strengths of each company within the group. Combining Sanyo’s solar technical capabilities with Panasonic’s wide global network will allow further synergy to be generated within the group and strengthen the solar business globally. 

“The brand change is part of the global strategy aimed at expanding the solar business of the Panasonic Group.” said Charles Hanasaki, president of the Solar & Smart Energy Division. “The same manufacturing and sales structure will continue as well as its advanced HIT solar modules – just under the Panasonic brand. Additionally, the Panasonic Group will continue to invest in the solar business, allowing us to offer a higher level of service to our business partners and provide our customers with higher quality, more efficient modules.”

Starting in 1975 with the development of amorphous silicon solar cells, Sanyo has more than 35 years of history in the solar industry. More recently, in 1997, Sanyo released its HIT (Heterojunction with Intrinsic Thin-layer) solar modules. The solar cells used for these modules are hybrids, with a unique structure comprising a thin mono-crystalline silicon wafer surrounded by ultra-thin amorphous silicon layers. HIT solar modules are known for their high conversion efficiency and excellent temperature characteristics, enabling them to generate more power than other types of crystalline modules, according to Panasonic.

Sanyo has another solar cell component factory – Sanyo Solar of Oregon L.L.C – located in Salem, Oregon, and that factory will continue to operate, Fowles said.