TOYO Expands U.S. Solar Push With Houston HJT Plant and Non-FEOC Supply Chain

Key Points

• TOYO is expanding its U.S. manufacturing footprint with a planned 1.5-gigawatt Houston HJT solar-cell plant. The $357 million facility is expected to begin operations in late 2027 or early 2028 and could employ more than 400 people.
• The company is building a non-FEOC supply chain using U.S. or Korean-origin polysilicon and other suppliers outside foreign entities of concern, positioning its products to meet U.S. tax-credit and sourcing requirements.
• TOYO reported sharp year-over-year improvement in first-quarter results, including $143 million in revenue, $47.8 million in gross profit and $28.4 million in net income. It expects 5.5–5.8 gigawatts of cell shipments and 1.1–1.3 gigawatts of module shipments this year.

TOYO NASDAQ: TOYO said it is expanding its solar-cell and module manufacturing footprint while positioning its supply chain to meet U.S. requirements for products sourced outside China and other foreign entities of concern.

Speaking at Webull’s Technology Sector Investment Webinar, Chief Strategy Officer Rhone Resch said the company operates solar-cell capacity in Vietnam and Ethiopia, module capacity in Houston, and is building a U.S. heterojunction technology, or HJT, solar-cell facility.

Resch described TOYO as a Japan-headquartered company focused on supplying utility-scale solar developers with high-efficiency products that comply with U.S. supply-chain and tax-credit requirements.

Manufacturing footprint and growth

TOYO said it shipped approximately 1.5 gigawatts of solar cells globally during the first quarter and reported about $143 million in quarterly revenue, according to Resch. The company has 2 gigawatts of cell capacity in Vietnam, 4 gigawatts in Ethiopia and 2 gigawatts of module capacity at its Houston facility.

Resch said the company expects annual solar-cell shipments of roughly 5.5 gigawatts to 5.8 gigawatts this year, compared with about 300 megawatts in 2023. Module shipments are projected to reach between 1.1 gigawatts and 1.3 gigawatts this year, up from approximately 250 megawatts last year.

TOYO’s Houston manufacturing site spans 567,000 square feet, according to Resch. The company recently added a second gigawatt of module capacity there.

Resch said first-quarter gross profit rose to $47.8 million from $4.8 million a year earlier, while net income improved to $28.4 million from a loss of $3.7 million. Operating expenses increased to $11.5 million from $6.1 million, he said.

Non-FEOC supply-chain strategy

A central part of TOYO’s strategy is maintaining an end-to-end supply chain that is compliant with U.S. restrictions involving foreign entities of concern, or FEOC. Resch said the company sources polysilicon from the United States or OCI, a Korean company with manufacturing in Malaysia, while its ingots and wafers are also sourced outside FEOC-linked suppliers.

“Our entire business model is successful without any of these policies,” Resch said, referring to U.S. manufacturing incentives and trade policies. He added that TOYO does not include Section 45X tax credits in its revenue forecast.

Still, Resch said the Houston module facility is eligible for Section 45X incentives through 2032. At full 2-gigawatt production, he said the incentives could amount to approximately $140 million annually.

The company is sold out through this year and into next year, Resch said during the question-and-answer session. However, he said TOYO seeks to retain some uncommitted production capacity to participate in the spot market, where it expects prices to rise.

HJT cell plant planned in Houston

TOYO is constructing a 1.5-gigawatt HJT cell plant alongside its Houston module operations. Resch said the facility represents a $357 million investment and is expected to begin operations around the end of 2027 or beginning of 2028. More than 400 people are expected to work on the cell line.

HJT technology currently delivers solar-cell efficiency of about 25%, Resch said. He added that HJT cells could eventually serve as a base layer for perovskite tandem cells, which he said could potentially achieve efficiency levels of 30% to 32%.

“The biggest gain is going to be in that cell technology,” Resch said, while noting that ongoing improvements in polysilicon quality, wafer design and manufacturing processes also remain important.

Addressing U.S. solar-cell supply gap

Resch said demand for domestic solar modules is outpacing U.S. solar-cell supply. He cited an expected gap of roughly 50 gigawatts between U.S. module manufacturing capacity and cell capacity by 2027.

TOYO plans to supply the U.S. market with cells from its Ethiopian operations as well as future domestic production, he said. Resch argued that products using non-FEOC materials can command a premium because solar-project developers need qualifying supply chains to access certain tax credits.

Resch identified Qcells and Suniva as competitors in the domestic market, while arguing that TOYO’s current TOPCon cells and planned HJT technology offer higher efficiency than older mono PERC technologies.

“You want to be the highest efficiency cell so you can get the best price,” Resch said, adding that TOYO’s focus remains on expanding U.S. manufacturing and serving utility-scale customers.

About TOYO (NASDAQ:TOYO)

TOYO Co Ltd. engages in the design, manufacture, and sale of solar cells and modules. It is involved in integrating the upstream production of wafer and silicon, midstream production of solar cell, downstream production of photovoltaic (PV) modules, and potentially other stages of the solar power supply chain. The company was founded on November 8, 2022 and is headquartered in Tokyo, Japan.

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