LDK Solar Quietly Girding For A Sunny Future

Before the global recession dug its teeth into our collective back pockets, it was common to hear analysts wondering if the solar industry wouldn't take off, exceeding expectations within the energy markets. No more -- with the money gone, solar stocks are down, investors appear leery and general expectations for growth have fallen.

Some of the actual companies involved appear to have forgotten to scale back their ambitions, though. Take LDK Solar for example; it's a Chinese company that makes solar wafers, the precursor to actual solar cells. The company is projecting profits above what Wall Street expects, and continuing full-speed with its efforts to build out capacity for polysilicon, a yet-earlier step in the supply chain.

Much of the information about what LDK is doing is only rumors, but there are enough of those to seem credible. Today, for instance, JLM Pacific Epoch reports via a Chinese news source that LDK is planning on making 10,000 new hires in 2009, after hiring 6,000 people earlier this year. So much for battening down the hatches.

The high expectations run counter to the pall that fell over the solar sector when Q-Cells, one of the world's largest solar companies, considerably lowered its own guidance earlier this month. But it's unlikely that LDK is betting on immediate growth.

Instead, the company is likely hoping that after the hard days of 2009, demand for solar cells will spike upwards -- which will perfectly place LDK to reap the rewards of what, in the current environment, may look like over-investment. But they'd better hope their crystal ball is as good as their multicrystalline wafers.