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First Solar, Inc.
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=== Qualitative risks === The key risks of an investment in First Solar, in order of importance (from highest to lowest), are as follows: # Competition in solar markets globally and across the solar value chain is intense and could remain that way for an extended period of time. The solar industry may experience periods of structural imbalance between global PV module supply and demand that result in periods of pricing volatility. If First Solar's competitors reduce module pricing to levels near or below their manufacturing costs, or are able to operate at minimal or negative operating margins for sustained periods of time, or if global demand for PV modules decreases relative to installed production capacity, First Solar's business, financial condition, and results of operations could be adversely affected.<ref name=":0">https://d18rn0p25nwr6d.cloudfront.net/CIK-0001274494/7ad6d7b0-00aa-4bb3-b61f-fd0fd17740e2.pdf</ref> # The reduction, elimination, or expiration of government subsidies, economic incentives, tax incentives, renewable energy targets, and other support for on-grid solar electricity applications, or other public policies could negatively impact demand and/or price levels for First Solar's solar modules. The imposition of tariffs on First Solar's products could materially increase its costs to perform under its contracts with customers, which could adversely affect its results of operations.<ref name=":0" /> # The loss of any of First Solar's large customers, or the inability of First Solar's customers and counterparties to perform under their contracts with First Solar, could significantly reduce its net sales and negatively impact its results of operations.<ref name=":0" /> # First Solar faces intense competition from manufacturers of crystalline silicon solar modules; if global supply exceeds global demand, it could lead to a further reduction in the average selling price for PV solar modules, which could reduce First Solar's net sales and adversely affect its results of operations.<ref name=":0" /> # Problems with product quality or performance may cause First Solar to incur significant and/or unexpected contractual damages and/or warranty and related expenses, damage its market reputation, and prevent us from maintaining or increasing its market share.<ref name=":0" /> # First Solar's failure to further refine its technology and develop and introduce improved PV products, including as a result of delays in implementing planned advancements, could render its solar modules uncompetitive and reduce its net sales, profitability, and/or market share.<ref name=":0" /> # Several of First Solar's key raw materials and components, in particular Cadmium Telluride (CdTe) and substrate glass, and manufacturing equipment are either single-sourced or sourced from a limited number of suppliers, and their failure to perform could cause manufacturing delays, especially as First Solar expands or seek to expand its business, and/or impair its ability to deliver solar modules to customers in the required quality and quantities and at a price that is profitable to First Solar.<ref name=":0" /> # First Solar's failure to effectively manage module manufacturing production and selling costs, including costs related to raw materials and logistics services, could render its solar modules uncompetitive and reduce its net sales, profitability, and/or market share.<ref name=":0" /> # First Solar's future success depends on its ability to effectively balance manufacturing production with market demand, effectively manage its cost per watt, and, when necessary, continue to build new manufacturing plants over time in response to market demand, all of which are subject to risks and uncertainties.<ref name=":0" /> # First Solar may be unable to generate sufficient cash flows or have access to the sources of external financing necessary to fund planned capital investments in manufacturing capacity and product development.<ref name=":0" /> # First Solar expects certain financial benefits as a result of tax incentives provided by the Inflation Reduction Act of 2022. If these expected financial benefits vary significantly from First Solar's assumptions, its business, financial condition, and results of operations could be adversely affected.<ref name=":0" /> # Existing regulations and policies, changes thereto, and new regulations and policies may present technical, regulatory, and economic barriers to the purchase and use of PV solar products, which may significantly reduce demand for First Solar's modules.<ref name=":0" />
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