Enphase noted in its two prior quarterly earnings calls that its total revenues were up, that margins had increased significantly (from teens to over thirty percent) and that new hardware was coming. Overall they painted a picture of a company that was doing well – and the market agreed by pushing share prices.
But Enphase also revealed that it is sold out months in advance due to a worldwide shortage of a component being eaten up by electric vehicle chargers. In its Q3 earnings call, Enphase noted that it has taken the unusual step of making its own components, by investing in a new dedicated manufacturing line for MOSFETs which it expects to come online during the first quarter of 2019.
In a letter to customers and partners dated February 5, and found on reddit.com in r/solar, Enphase has stated that lead time for getting inverters, even with the new manufacturing volume coming online recently, is approximately 13 to 15 weeks. The company also noted it has signed two new contracts with manufacturers of the component that would come online in Q3 and Q4 of 2019. With these new additions, the company believes the lead time on its products will then improve to approximately 6 to 8 weeks.
In the Q3’18 earnings call, President and CEO Badri Kothandaraman said:
We recognized this problem about six to eight months ago. I invested money, creating a dedicated line for us to create capacity, and that line is coming on board in January of 2019. So I expect majority of my supply problems to be gone in Q1 of ’19.
Increased global demand by electric car chargers of High Voltage Power Field Effect Transistors have led to supply greatly tightening. In the Q3’19 call Enphase noted the MOFSET 600 volt transistor was made only by a handful of companies: STMicroelectronics, Infineon, Alpha & Omega Semiconductor, On Semi, and Toshiba.
Enphase says that it appreciates the flexibility its buyers have given it in delivering product. This might mean that Enphase is doing its best to make sure as many of their customers as possible get access to hardware, while limiting the total volumes anyone is getting; in essence rationing.
The image to the left was found on Infineon’s website, one of the manufacturers noted by Enphase in the Q3’18 earnings call, and is a 600V CoolMOS™ C7 Power Transistor (pdf). The specification page notes it is applicable for, “PFC stages and PWM stages (TTF, LLC) for high power/performance SMPS e.g. Computing, Server, Telecom, UPS and Solar.” The component is approximately 40 mm tall, 16 mm wide, and 5 mm thick. A similar unit, but not the same part number as above, was found for sale on Mouser Electronics with a list price of $3.09.
High voltage electric vehicle charging is enabled by these components, which speeds up charging times while making for more efficient energy use, but also lightens the system’s weight in cars by lowering complexity and allowing for fewer on vehicle parts.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: email@example.com.
Thank you for the added details, John!
Trying to determine if this is a good thing or bad thing for Enphase. Thanks.
Since they’re growing still, even with missing out on this revenue, then I would argue a net ‘good’. And it seems Wall Street agreed that the value of the loss was still worth it because of broader growth and significant increases in margins. Note in the above link that on Feb 5th the stock price moved up strongly, and has held it pretty nicely.
That’s what I’m thinking. I am a shareholder, and pleased to see the bottom line improving. Just want to be sure they remain ahead of the curve and anticipate such shortages in the future. Thanks for your excellent article.
I smile at Enphase’s continued “spin” marketing methods…they had been my *top* marketing spinners for the past ten years (spinning means taking average or bad things and using words and innuendo – turning them into perceived wonderful things).
In this case: The fact that they failed to pay their bills over the past 2 – 3 years put them on several black lists from those jilted suppliers of transistors and Enphase simply couldn’t buy from them any more… gets spun into “Look at us! We are sold out of product and therefore must be so popular that you must hurry and get your pre-orders into us, in order to get in the half year waiting line! Hurry hurry!” Like I said, I smile and slowly shake my head.
Was Badri not paying those bills or someone else before him? Is it not commendable then that he has been able to secure supply again? If what you say is true there is a price to pay and suppliers may not immediately trust enphase’s newly found market demand for their products. This may be why Badri is working hard to build credibility.. and why backlogs may be necessary. And it does look like he is paying the price for past misdeeds, literally.
Not a nice contribution, yours.
An additional data point. Short interest peaked in mid/end of October. And has since been reduced by 24%. Further, the short interest dollar amount has been consistently reduced in each 15-day period of reporting which means a firm down trend. Shortsellers -with markedly better information than retail- reducing their short bets for the last 12 weeks is very meaningful.
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.