Pricing Trends and ASPs
Q: Are prices increasing, and can higher ASPs be expected soon?
A: Management observed that market pricing has firmed up, increasing by $0.03 to $0.04 per watt since early April. This uptick is encouraging but not yet reflected in Q1 bookings, which averaged $0.30 per watt before adjusters. While they are pleased with the trend, they are cautious about committing to ASPs in the mid-$0.30s at this point.

Impact of Policy Changes
Q: How are recent policy developments affecting bookings and pricing?
A: Recent policy actions, like the new AD/CVD petition and potential removal of the bifacial exemption, have positively impacted pricing and customer engagement. Pricing has increased by $0.03 to $0.04 per watt since early April, and there's been a shift in sentiment with increased customer activity. Management sees policy moving in their favor, potentially accelerating bookings.

Bookings Growth Outlook
Q: Can guidance still be met despite potential terminations?
A: They are maintaining their volume sold guidance of 15.6 to 16.3 GW for the year. Discussions are ongoing with a customer who may exercise a termination for convenience, but management believes they can reallocate or resell the volume. This may affect cash timing but won't change the overall guidance.

Capacity Expansion Plans
Q: What are the considerations for adding another factory?
A: Key factors include strong, sustained demand and a stable policy environment post-November elections. Management is preparing supply chain strategies and site selections to act quickly when appropriate. They are confident in their ability to execute expansions efficiently when conditions are favorable.

Technology Advancements
Q: What's the update on tandem technology and commercialization plans?
A: They are progressing on multiple fronts, including thin-film CIGS tandem products, thin-film crystalline technology, and perovskite research. Investments of nearly $0.5 billion in R&D and pilot lines are nearing operational status. They expect better insight into commercialization timelines by year-end, emphasizing the need for reliability before market release.

Excess Panel Inventory
Q: What is the status of excess panel inventory in the U.S.?
A: Management has heard reports of excess inventory around 30 to 40 GW, due to high import rates ahead of potential policy changes. This inventory needs to be managed and deployed by year-end to avoid tariffs, but enforcement details are uncertain. They recognize this could influence market dynamics but cannot confirm exact figures.

Demand from Data Centers
Q: How significant is demand from data center customers?
A: Large tech companies like Apple, Google, Microsoft, and Meta value certainty and reliable sourcing, making First Solar a preferred supplier. While no specific figures were provided, management expects to continue being favored for projects supplying power to data centers due to these companies' renewable goals and supply chain concerns.

Opportunity from Spot Pricing
Q: Can excess capacity be sold at higher spot prices?
A: While the utility-scale solar spot market is limited, management sees opportunities to capture higher prices when short-term volumes become available due to customer terminations. They work closely with customers seeking products a few quarters ahead, potentially benefiting from current pricing trends.

AD/CVD Critical Circumstances
Q: Will you request critical circumstances in the AD/CVD case?
A: Whether to request critical circumstances, imposing retroactive tariffs, depends on future developments. Management noted China's aggressive overcapacity and market behaviors. If imports remain stable, they are less likely to seek retroactivity, but the coalition will decide based on evolving facts.

Customer Preparedness
Q: Are customers securing critical equipment despite long lead times?
A: Many large customers have proactively secured critical equipment like transformers and circuit breakers to mitigate supply chain constraints. They try to reduce risks by ordering spares and working ahead, but disruptions can't be entirely avoided. Management collaborates closely with customers to manage schedules and allocations as needed.

Lower Cost of Goods Sold
Q: What drove the lower cost of goods sold excluding credits?
A: Q1 credits were $194 million, higher than the guidance of $109 million, contributing to lower COGS per watt. The higher credits partially explain the reduced costs, though management did not detail specific drivers beyond the increased credits.