Operator: Your next question comes from the line of Brian Lee from Goldman Sachs. Please go ahead.
Unidentified Analyst: Hi, thanks for taking the question. This is Grace on for Brian. I guess — my question on competition. So 1 of your crystalline computer recently announced a 5 gigawatts sale expansions. It’s I think it’s the first sign of whatever is the [ph]equation from China in the U.S, so the CapEx is lower, but can you speak to your understanding of the cost structure for overseas peer building in building?
Mark Widmar: Sure. So there’s a lot out there, the announcement that was made recently this week. — 1 of our competitors that will be putting sales in the U.S. And look, there are others that are doing sales in U.S. Myer Burger made a commitment to do sales in the U.S., handle a few cells doing sales in the U.S., they’re not a long term and want. But one thing I want to make sure is clear when you said vertically integrated, it’s not vertically integrated all the way through to the poly-silicon. So yes, it’s a module assembly with cell manufacturing. The wafer still are not manufactured in the U.S., the ingots, obviously not in the U.S. ignores the uncertainty were exactly where the poly-silicon is coming from. It could be from the U.S. manufacturer or potentially, Europe or Korean, I guess.
So it’s not an apples-to-apples comparison. But what I’ll say is that if you look at the announcements that they’ve made, there’s about $800 million for the sale and a few hundred million, $200 million, $300 million for the module, which is pretty comparable to our fully vertically integrated. So they’re about $1.1 billion. But the — what I think is maybe the most telling number to look at from a competitive standpoint is the headcount. I think it’s 4 or 5 gigawatts. It’s 2,700 heads for just cell and module. We are on a road map that will be 14 gigawatts of fully vertically integrated. So think about that from the production of the poly-silicon all the way forward. And our entire head count for 14 gigawatts in the U.S. will be comparable to that 2,700.
So on a head count basis, we’re about — they’re about 2.5x higher on a headcount basis than we are. That adds about $0.02, $0.025 on a cost per lot base using kind of U.S. labor brings. So I think that’s 1 thing for sure that will create a much higher cost profile for that manufacturer. The other is they don’t have a local supply chain. As we indicated in our call, we have localized our supply chain. We have been in front of that game. So our blast is here in the U.S. As we indicated, our back rails on Series 7 are here in the U.S. The current components or so that are identified through the domestic content from the underneath the IRA, all of our components of our Series 7 product will be mainly the U.S. That factory will most likely have on at least one major component.
Glass is not going to be available in the U.S. There are no glass manufacturers today. In the U.S., it could happen, but it will be much more expensive than it would be to source from Southeast Asia or China. But then they have to pay the freight, and it’s expensive to ship glass,, which is heavy from Southeast Asia or China into the U.S. We’re also going to have intention to deal with duties, no different than the comment that we made on our prepared remarks, there are duties now that are being considered for extruded aluminum. And there’s a potential that it could be applicable to the frame. Our Series 7 product, as an example, does not use aluminium. It’s steel and it’s domestically sourced. So it doesn’t have that type of exposure. So I am very confident, and this is one of the things that we said before is that is that all we want is a level playing field that we all compete on the same basis and under the same policy environment.
As long as we have that, I have no doubt that we are materially cost advantage to any other U.S. manufacturer for the various reasons that I’ve mentioned. We feel like we’re in a position to strike. We believe that we have a key point of depreciation around our manufacturing excellence, and we’re more happy to compete with anyone who would choose to manufacture in the U.S., and we welcome it. We believe the IRA in order to be successful is to create a diversified supply chain with many different types of technology, prism silicon films, whether it’s cattail or eventually parasites or others. We need that if we want to ensure long-term energy independent and security for the U.S. to become a technology leader. We need more manufacturing we need more innovation and different types of technologies to continue to move this forward.
Operator: Your next question comes from the line of Joseph Osha from Guggenheim Partners. Please go ahead.
Joseph Osha: Thank you and hello, everyone. Happy Halloween. Following on the previous question, assuming that most of what we see in the U.S. is going to be modules sourced with domestic cell, but almost certainly overseas wafer and poly. Based on what you see right now, can you see those suppliers managing to meet domestic content requirements under the IRA? And if so, just why we’re not, I’m curious as to what your thinking is on that?
Mark Widmar: So as we currently understand the supply chain and the availability of the domestically-sourced components that were identified under the IRA domestic content guidance that was provided. The only and really identifiable component that we believe — I mean there could be some small stuff like adhesive and stuff like that, but that’s not going to move the needle. But most likely, will really tell us a component that will move the needle, and that will drive some meaningful amount of domestic content will be the cell. If you look at this most recent announcement, I think that you said they’ll be up and running by the end of ’25, which means largely that those cells would be available for production and shipments and then eventually installation to or assembled in the models and then eventually installation on your project in ’26.
And I believe the requirements under IRA and ’26 is close to — I think — so they have to — so you’re starting off at 40% domestic content and it steps its way up all the way to 55%. So they’ve got a window now that by the time they can actually realize the benefit of domestic content that requirements will be at a higher threshold than it is right now. At least the math that we run just looking at the cell and understanding the direct material, direct labor cost crystalline silicone at it will be very difficult for the cell-only domestically sourced module to meet the project level requirements to achieve the domestic content bonus. Series 7, as I indicated, which is the vast majority of our 14 gigawatts of the magnetic production is 100% domestically sourced.
Therefore, it qualifies as a domestic product. it will be materially advantaged in enabling of domestic content bonus at the project level versus just a crystalline silicon module with a in domestically sourced sell.
Operator: Your next question comes from the line of Vikram Bagri from Citi. Please go ahead. Vikram, your line is live.
Vikram Bagri: Sorry about that. Good evening, everyone. I wanted to ask about capital allocation. At the Analyst Day, we understood that there is some downside to tech CapEx by implementing some processes at the supplier level. Any updates to share there? Also, Alex, you mentioned that repatriating cash, it sounds like, is not the most efficient path to fund CapEx in the U.S. So what the cost of repatriation is. And staying on the same topic, understand that funding buybacks with cash is not on the table yet. I was wondering if repatriating the cash longer term can fund for the buybacks longer term? And then finally, I was wondering if common equity is still off the table completely.
Mark Widmar: I’ll take the first one and then Alex take all the rest of them. So yes, we are still working through with our supplier to enable various coding and capabilities that would resulted in us not having to make substantial capital investments related to our upgrades for our pure technology. Testing is ongoing. What I’ll say is the early indications. A long way still ago. I want to make sure it’s very clear. It’s a long way still to go. — but early indications on what we’ve seen so far is very promising that we will be able to find a way to provide — or to have a supplier provide the coatings to the glass without us having to do on our own. Now look, there’s some trade-offs with that such as the CapEx balance is also the opportunity to further optimize the buffer layer, which is what they’re putting on to capture better performance at the semiconductor level.
