Sanyo Electric is planning to substantially expand production of solar-cell wafers with the construction of a new factory in the U.S.

The factory in Salem, Oregon, is expected to begin producing the wafers, which are the silicon sheets that are cut up to make solar cells, in October next year. Full capacity of 70 megawatts (MW) worth of wafers per year will be reached by April 2010, Sanyo said in a statement.

Sanyo will invest $80 million in the construction of the factory, which will employ 200 people.

At present, Sanyo produces solar wafers at a plant in California that has an annual production capacity of 30MW, so the new facility in Oregon represents a big expansion of the company's production capacity.

From Oregon, the wafers will be shipped to Sanyo factories in Japan where they are made into solar cells. The cells are then shipped to factories in either Japan, Mexico or Hungary for the final production step of being made into solar modules.

Sanyo has been expanding its solar business to keep up with growing demand from consumers and businesses for solar panels. In August, it opened a new solar module factory in Japan, its third in the country, and said it is considering expanding production at its module plans in Hungary and Mexico.

The European plant is currently the company's largest with an annual capacity of 145MW. That represents over half of Sanyo's total solar module production of 260MW.

The IDG News Service is a Network World affiliate.