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Suntech Gets Short-Circuited

Investors hammered the shares Wednesday after the solar-cell maker disappointed the market with its 2008 production outlook

For the past few years, Suntech Power Holdings (STP) has been an overachiever, blowing through its production forecasts in its pursuit of a bigger piece of the global solar panels market.

But with silicon in short supply and silicon prices on the spot market nearly 30% higher than a year ago, Suntech has turned conservative on production, even back-loading the output planned for this year, in an effort to buy time until prices for silicon, the raw material used to manufacture photovoltaic cells that make up solar modules, show signs of moderating.