There are worries of oversupply of solar modules and a proliferation of LED manufacturers in China. But who cares when you're the one providing the equipment to make that oversupply happen?
GT Solar (Nasdaq: SOLR) is now more than just a supplier to the solar industry now that it is manufacturing advanced sapphire crystallization furnaces. Its newest business is off to a hot start less than a year after the acquisition was announced.
Just yesterday, the company announced $91 million in orders from three customers in Asia for such furnaces. That follows a $218.9 million order from Guizhou Haotian Optoelectronics Technology, which -- based on my keen understanding of brand names -- probably won't become a household name in the U.S.
Proliferation of LEDs
As is the case in solar, the proliferation of manufacturers of LEDs isn't good news for Cree (Nasdaq: CREE) or SemiLEDs (Nasdaq: LEDS). More manufacturers in the industry put pressure on prices, which has been a thorn for both recently.
But other equipment makers like Veeco Instruments (Nasdaq: VECO) and Aixtron (Nasdaq: AIXG) have benefited from the LED manufacturing growth in China.
GT Solar's business can capitalize on increasing diversification through its sapphire segment. Polysilicon and PV dominated the company's $1.23 billion backlog to end 2010, and as orders for sapphire equipment come in, that reliance will diminish.
GT Solar's stock is back near its 52-week high, but I think the stock has much further to run. The stock's P/E ratio is just 10.5 and forward P/E stands at 7.9, even before you consider the fact the company has crushed estimates recently. That's why I have given GT Solar a thumb up on Motley Fool CAPS. What do you think about GT Solar?
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