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Module maker Maxeon says U.S. Customs and Border Protection officials have halted all of its panel imports from Mexico since July as the federal law enforcement agency investigates its compliance with the Uyghur Forced Labor Prevention Act (UFLPA).
Maxeon, a Singapore-based photovoltaic module manufacturer, said in its second-quarter earnings report that U.S. Customs and Border Protection has for the first time detained imported solar panels from its module factories in Ensenada and Mexicali, Mexico. The company said U.S. authorities are trying to determine whether the panels comply with the UFLPA.
“These detentions affected both Performance Line panels manufactured at our Mexicali factory for utility-scale customers, and [interdigitated rear contact] panels manufactured at our Ensenada factory for DG customers,” the company said. “[The customs agency] has explained that these are routine detentions unrelated to any specific Maxeon concerns.”
The company said it is cooperating fully with the agencys requests for information, maintaining ongoing contact with authorities to facilitate the investigation and address their queries. It also said it is not sure when the panels will be released or when it will resume importing panels into the United States.
“Maxeon has long been an ESG leader in the solar industry and a supporter of the UFLPA since its inception. Maxeon continues to require a UFLPA-compliant supply chain for its products imported into the United States, including polysilicon produced outside of China for which we pay a significant premium compared to polysilicon produced within China,” the manufacturer said. “Based on our internal and third-party reviews, we believe our supply chains comply with all relevant rules and regulations as well as key ESG standards, but we do not have visibility into the [border agency’s] process or timeline, and therefore are uncertain when we will be able to resume deliveries in our largest end market.”
In May, Chinese wafer maker TCL Zhonghuan revealed its intention to become a majority shareholder in Maxeon. The Chinese company said it would finalize the deal through a series of financial transactions, including the issuance of convertible bonds and additional shares through a private placement.
TCL Zhonghuan said it intends to use up to $197.5 million for the acquisition, which will increase its stake in Maxeon from 22.39% to a controlling stake of at least 50.1%. If the transaction is completed, Maxeon will become a subsidiary controlled by TCL Zhonghuan, and its results will be consolidated into the Chinese companys financial statements.
“The series of significant investments we announced yesterday together with our strategic partner, TZE, will strengthen our balance sheet, and this recapitalization puts Maxeon in a strong financial position and reinforces our role as a leading player in the renewable energy market,” a Maxeon spokesperson told pv magazine at the time .
The company stated in its second quarter financial report that it is facing significant challenges, mainly due to external market factors and political issues. During the second quarter, it recorded revenue of $184 million and supplied 526 MW of panels.
“GAAP operating expenses for the quarter were $62 million and included a provision for expected credit losses of $11 million resulting from SunPower Corp’s recent bankruptcy filing, largely associated with unsecured indemnities for ongoing litigation and warranty claims inherited from the 2020 spin-off,” it said.
Given the current challenges, Maxeon did not provide guidance for the third quarter and withdrew its full-year 2024 guidance.
“Due to these uncertainties, as well as the closing of the transactions related to the recapitalization and the related note conversions, we will not be conducting a conference call to discuss second quarter results,” he said. “We intend to resume quarterly results conference calls once the business has stabilized, and we are able to provide more meaningful insight into current business metrics and future expectations.” |
