The US’ reciprocal tariffs on India, Malaysia, and Vietnam – key production hubs for First Solar catering to the US – have prompted the company to revise its FY 2025 guidance. Against a guidance of $5.3 billion to $5.8 billion, the US-based manufacturer now aims to achieve net sales of between $4.5 billion and $5.5 billion for this year.
The upper end of the revised guidance assumes that the 10% universal tariff placed by the US on all its trading partners remains in place throughout the year, while the lower end assumes implications from the now temporarily suspended (90 days) country-specific reciprocal tariffs, as well as non-tariff related risks to its operations.
The US has announced a 26% reciprocal tariff on products being shipped into the country from India, 24% on those coming in from Malaysia and 46% on Vietnam. The implementation of these tariffs is in abeyance for a period of 90 days, for now. In addition, there exists policy uncertainty related to the fate of the Inflation Reduction Act (IRA) under the Trump administration.
“The recently announced tariffs directly and adversely impact First Solar in multiple areas, including by increasing capital expenditure costs for our new US factories, increasing US factory production costs, adding significant cost to import finished goods to the US to our Malaysia, Vietnam, and India facilities and therefore potentially driving reduced international factory production which leads to increased underutilization expenses,” explained First Solar CFO Alexander Bradley on the company’s earnings conference.
The management also touched upon the antidumping and countervailing duties imposed on Chinese solar cells from Cambodia, Vietnam, Malaysia and Thailand, saying that Chinese companies are seeking newer locations to access the US market. This includes Laos and Indonesia, and some companies are even going to other regions like Saudi Arabia. First Solar said it plans to continue to engage in trade actions to support a level playing field.
First Solar also expects to sell between 15.5 GW and 19.3 GW of its modules during the year, as opposed to the guidance of 18 GW to 20 GW provided earlier. For Q2 2025, it projects module sales between 3 GW and 3.9 GW.
“Despite the near-term challenges presented by the new tariff regime, we believe that the long-term outlook for solar demand, particularly in our core U.S. market, remains strong, and that First Solar remains well-positioned to serve this demand,” said First Solar CEO Mark Widmar.
Q1 2025
During Q1 2025, First Solar reported over a 44% sequential decline in net sales owing to seasonality, even though there was an improvement of more than 6% year-on-year (YoY). Its gross margin was 40.8%, compared to 37.5% in Q4 2024 and 43.6% in Q1 2024 (see First Solar Achieves FY2024 Guidance With 27% YoY Increase).
Net income for the reporting quarter declined to $210 million, down by more than 46% quarter-on-quarter (QoQ), and by over 11% YoY.
First Solar’s factories produced 4 GW worth of solar modules during the initial 3 months of 2025, comprising 2 GW of Series 6 and Series 7 each, while recording 2.9 GW in sales. At the end of March 2025, it had 66.1 GW in overall backlog, 13.9 GW of which are in forward contracts for international product delivery to the US.
It may exercise the option to terminate around 12 GW of its international product in the backlog as per contract terms, if the customers don’t share the tariff costs, to protect itself against economic losses, stated the management. The company says its US-based production remains unaffected by these headwinds.
During the quarter, it completed limited commercial production of its CuRe, copper replacement technology. Initial performance data of modules deployed in the field shows promising results. The management also said that its 3.5 GW DC Louisiana factory is projected to come online in Q3 2025.
