Apr. 17, 2008 – Trina Solar says it is ceasing development of its announced $1B 10k MT polysilicon production facility, and will let “lapse” a related equipment contract with GT Solar, citing better long-term supply conditions.

The company says that it anticipates “greater access to polysilicon feedstock” after an assessment of raw material requirements and improving market conditions, and will instead pursue long-term contracts to meet supply needs, as well as possible investments in future polysilicon projects.

The news comes days after Trina signed a new eight-year supply deal with GCL Silicon Technology Holdings equivalent to 2600MW of solar modules, saying it has now secured ~95% of its feedstock requirements for 2008.

Chairman/CEO Jifan Gao also noted Trina continues to have a “strong working relationship” with GT Solar despite the cancelled deal, including providing multicrystalline systems to support targeted module capacity of 350MW by the end of 2008.

In a Q&A posted to Trina’s Web site, the company explained that polysilicon ASPs are still high but should decrease in the long term as significant capacity comes online, and today’s long-term contract prices should decline over time, which will help reduce the company’s per-watt polysilicon costs and improve margins. “As a result, the company does not see the need to commit capital to building its internal capacity for polysilicon production,” the firm said in a statement, “but will still evaluate investing in other projects opportunistically where attractive economics are offered and that involve notably smaller investment scale.”