First Solar (FSLR) is taking no prisoners, irrespective of nationality. Filing a lawsuit for patent infringement in the U.S. District Court for the District of Delaware, the company claims that China's JA Solar and Corning (GLW) subsidiary, American Panel Solutions, are violating a U.S. patent related to manufacturing techniques for TOPCon crystalline silicon solar panels.
Shares of First Solar responded positively to the news, gaining more than 3.5% in Friday's trading session, only to give most of it back and close 1.45% higher.
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Commenting on the issue, Jason Dymbort, general counsel of First Solar, said, "We have been clear that we will actively defend our intellectual property rights in the U.S. and internationally. This lawsuit is an effort to hold JA Solar and AMPS accountable for their unauthorized use of First Solar's patented technology and reinforces the need for TOPCon manufacturers operating in the United States to respect the well-defined framework of intellectual property law."
Interestingly, Corning paid JA Solar about $278 million to acquire the latter's U.S. solar-module manufacturing facility in April 2025.
About First Solar
Founded in 1999, First Solar is the world's largest thin-film PV module manufacturer and the largest PV module manufacturer in the Western Hemisphere. Notably, the company has spent more than two decades developing and manufacturing cadmium telluride (CdTe) thin-film solar modules. Additionally, it is the only U.S.-headquartered company among the world's largest solar manufacturers that does not manufacture in China.
Valued at a market cap of $18.8 billion, FSLR stock is down 33.2% on a YTD basis.
Having said that, why is TOPCon so important to First Solar? Let's find out.
www.barchart.com Top Priority for TOPCon
First Solar's legal tussle over TOPCon is the latest in a continuation of numerous other lawsuits against companies like Canadian Solar, JinkoSolar (JKS), Trina Solar, and T1 Energy (TE). The underlying reason is broadly the same across the cases: First Solar alleges competitors are manufacturing or selling TOPCon solar products using manufacturing methods covered by First Solar's patents, without authorization.
So, what makes it valuable for First Solar?
TOPCon stands for tunnel oxide passivated contact. In a conventional silicon solar cell, some electrical charge is lost where the cell makes contact with metal. A TOPCon cell places an extremely thin oxide layer and a silicon layer at that contact. The arrangement helps useful charges pass through while reducing the losses that otherwise become heat. More of the sunlight striking the cell can therefore become electricity. The attraction for manufacturers is not just a higher efficiency figure, as greater output from a panel can reduce the amount of land, mounting equipment, and installation work needed for a given project.
Notably, First Solar obtained the U.S. patents for this technology when it purchased solar technology startup TetraSun in 2013. Moreover, these patents cited by First Solar cover manufacturing methods, and its portfolio includes rights in multiple countries.
Thus, TOPCon may not be a product line for First Solar. However, through licensing this technology, a new avenue of revenue in the form of royalties opens up. And when other companies allegedly infringe on it by using TOPCon without paying the required licensing fees, First Solar will continue to fight it out in the courts. Yet, how fruitful or frustrating that will be will depend on the outcomes and the time period of these suits.
Mixed Q2 Results
The second quarter was tough for First Solar. Net sales declined by 4% from the previous year to $1.06 billion, missing the consensus estimate by $4.3 million. Contracted backlog for the quarter stood at 45.1 GW as gross margins improved to 57.3% from 45.6% in the year-ago period. However, there is an asterisk here, as much of that improvement can be attributed to an estimated $89 million tariff-related benefit, a greater share of modules qualifying for domestic manufacturing tax credits, and lower logistics costs. Removing this effect, the gross margins would have been almost 8% lower.
Overall, earnings rose by 23.3% YoY to $3.92 per share, easily outpacing the consensus estimate of $2.90. Net cash used in operating activities for the first half of 2026 was lower than it was in 2025, coming in at $359.8 million compared to $458.4 million last year. Overall, First Solar ended the June quarter with a cash balance of $1.7 billion, which is much lower than its short-term debt levels of $37.6 million.
First Solar is trading at undervalued levels, though. Its forward P/E and P/CF of 9.93 and 16.21 , respectively, are below the sector medians of 23.53 and 20.55, respectively, while the forward P/S of 3.73 is similar to the sector median of 3.53.
Analyst Opinion
Considering this, analysts have assigned an overall rating of “Moderate Buy” for FSLR. The mean target price of $268.07 denotes a potential upside of 53.5% from current levels. Out of 33 analysts covering the stock, 17 have a “Strong Buy” rating, three have a “Moderate Buy” rating, 11 have a “Hold” rating, and two have a “Strong Sell” rating.
www.barchart.com On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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