Canadian Solar Inc. ("Canadian Solar") (CSIQ) announced that a wholly-owned subsidiary of its majority-owned subsidiary CSI Solar Co., Ltd. ("CSI Solar") has entered into a multi-year investment agreement (the "Agreement") with the municipal government of Yangzhou City in Jiangsu Province, China. Under the Agreement, CSI Solar plans to add vertically integrated high efficiency wafer, cell, and module capacity, as well as battery system manufacturing capacity, in Yangzhou's clean energy manufacturing industrial park.
The project plan will be carried out in three phases, with phase I being 14 GW of wafer and cell capacity. Phase I is expected to commence production in the second half of 2023, while the implementation of phase II and III is subject to change, at the Company's discretion, based on market conditions and the Company's assessments. With this announcement and considering the solar supply chain's demand and supply backdrop, the Company updates its 2023 year-end capacities to 20 GW of ingot, 35 GW of wafer, and 50 GW of cell and modules. The Company will provide further guidance on 2023 capital expenditures in the next earnings call.
Dr. Shawn Qu, Chairman and CEO of Canadian Solar, commented, "We are pleased to expand our manufacturing base in the latest high-efficiency solar and battery storage products to better support the strong demand needs of our customers. Our capacity additions will further enhance our profitability in an environment of rapidly declining upstream raw material costs, and we are dynamically adjusting our capacity plans to account for a market backdrop with pockets of large supply as well as pockets of tight supply relative to demand. Importantly, our business plans are designed to strengthen our long-term leadership position and we expect these additions to do just that."