I'm not sure what to make of this. Trina has contracted for the majority of their silicon requirements through 2009 and have sold 70% of their capacity. If I were the analysts I'd be asking questions about Trina's capital adequacy (they are among the most leveraged of the solars) rather than GCL's. Trina can go to the spot market for silicon and that price should be dropping. On the other hand, GCL did have to postpone their planned IPO.
From Tech Trader Daily:
Among the many factors that influence the solar power stocks on a daily basis is the question of what manufacturers’ costs will be tomorrow, next week, a year out, and further into the future. Friedman, Billings, Ramsey analyst Mehdi Hosseini today chopped in half his target price for Trina Solar (TSL), based in China, out of a belief that a coming silicon supply shortage will be bad for the company’s margins given it gets three quarters of the polysilicon it needs to make panels from one supplier in China....MOREIt's not as if this came out of the blue. On September 12 we relayed:
...Trina will need capital to expand its manufacturing and to buy additional wafers and polysilicon. Wang said that, although a recent deal with GCL Silicon calls for many of the wafers that Trina expects to need, it's best to get another supplier on board so as not to depend on a single one. As far as polysilicon, the company has 80% of its projected 2009 output covered by long-term polysilicon contracts, compared with this year's situation when less than half of its output is coming from long-term supply agreement....