KUALA LUMPUR, Feb 7 — Sanyo Electric Co will close an ageing solar wafer factory in California to start up operations in Malaysia as solar panel prices continue to fall.

The Japanese company’s ¥45 billion (approximately RM1.77 billion) plant in the Kulim Hi-Tech Park, Kedah, will produce 300 megawatts (MW) of wafers, solar cells and modules when operations fire up in December this year, Bloomberg reported.

The business news agency reported yesterday that the closure of the nine-year-old Carson plant, which makes the equivalent of 30MW of silicon ingots and wafers for solar cells a year, will affect 140 workers.

The job cuts are equivalent to 40 per cent of Sanyo’s total workforce in the US.

Sanyo will retain a 70MW plant in Salem, Oregon, which also makes ingots and wafers.

Panasonic Corp, which owns Sanyo, said the California plant will be closed in October as equipment there was getting old and the company found it difficult to expand its business there due to the small size of the site.

“Price competition is also getting tough,” Panasonic spokesman Masatsugu Uemura was quoted as telling Bloomberg.

Prices for solar panels and raw materials fell last year as Chinese manufacturers increased production, leading to excess capacity after European governments cut back on subsidies.

Sumco Corp, a Japanese silicon wafer maker, said on February 2 that it will cut about 1,300 jobs, or 15 per cent of its workforce, as it withdraws from its solar manufacturing business due to declining prices.