The weak demand for solar modules in the first-half of the year has also impacted the supply chain, as backsheet specialist, STR Holdings has lowered revenue guidance for its second-quarter financial period. According to STR module manufacturers have slowed build rates and reduced material purchase orders due to excess inventory and overcapacity. STR expects its solar segment sales to be in the region of US$68 - US$69 million, compared to previous guidance of between US$74 and US$78 million.

“We are obviously very disappointed to have to lower our guidance this quarter, especially considering that our strong first quarter performance had continued through early June,” remarked Dennis L. Jilot, Chairman, President and Chief Executive Officer, STR Holdings. “Due to the uncertainty of incentive programs in Italy and Germany, which took longer to resolve than anticipated, lower solar module demand has resulted in excess inventory and overcapacity throughout the Solar supply chain. Late in the second quarter, these industry-wide conditions caused our customers to slow their build rates and reduce purchase orders issued to us. It is also important to note that the slowdown appears to be broad-based, rather than customer-specific.”

However, STR also noted that it had been impacted by a steep increase in resin costs during the quarter, which would impact margins and new product introductions.

Overall, STR guided sales for the second quarter to be in the range of US$98 to US$101 million, below previous guidance of sales between US$104 and US$110 million.

Due to market conditions, STR noted that it would not be providing full-year financial guidance.