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GT Advanced Technologies A Likely Loser in Looming Solar Trade War

01.01.70

Quotes a thinly veiled threat from China’s Ministry of Commerce: “The United States should avoid abusing trade remedies which will affect bilateral trade and mutually beneficial cooperation between China and US enterprises in the new energy sector.” The MOC “…warned last month that the probe could damage energy cooperation between the two countries and impede the progress of global efforts to deal with climate change.” Moreover, also last month, the MOC announced it would launch an investigation into U.S. stimulus programs that support solar businesses in Washington, Massachusetts, Ohio, California, and New Jersey.

Momentum is building toward a trade war in solar energy between China and the U.S. U.S. companies that export to China will likely be the biggest losers in this battle. For example, GT Advanced Technologies ( GTAT ) reported in its Q2 investor financial summary on Nov 8 that 86% of its Q2FY12 $218M in revenue came from Asia. This compares to 98% in the previous quarter. Based on the company’s commentary, it is clear the majority of the Asian revenues come from China.

Source: Seeking Alpha