Four Trade Actions on Ethiopian Cells

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In April 2024, U.S. solar manufacturers petitioned for duties on solar cells from Vietnam, Cambodia, Malaysia, and Thailand, claiming the cells were sold in the U.S. at unfairly low prices and backed by government subsidies.

That October, a solar cell maker with a factory in Vietnam announced a new cell plant in Ethiopia, a country the petition didn’t cover.

Its revenue fell from $138.1M in H1 2024 to $38.9M in H2, which it blamed on shifting to non-U.S. markets because of the duties.

Then the Ethiopian plant started production in April 2025, and every cell it made that year went to U.S. end customers. The company’s revenue rose 141.5% in 2025, to $427.4M, then another 87.6% y/y in H1 2026.

But in late May 2026, U.S. Customs and Border Protection (CBP) started detaining the company’s Ethiopian cells.

Then, in July, the Commerce Department opened an inquiry into whether solar cells completed in Ethiopia with Chinese parts should pay the same U.S. duties as cells made in China.

The company that built the Ethiopian plant is TOYO Co., Ltd (Nasdaq: TOYO), a ~$164M solar manufacturer headquartered in Tokyo.

It makes solar cells in Ethiopia and Vietnam and assembles panels in Texas, and 80.7% of its H1 2026 revenue came from U.S. end customers.

The stock trades at ~$3.83/share, down 77.5% from its $16.99 peak on June 4, 2026, and below the $4.24 it closed at on its first trading day in July 2024:

At $3.83/share, TOYO’s EV of $137.2M is just 0.9x its TTM EBITDA of $156.4M, and the stock trades at 2.0x its TTM net income of $80.5M.

Besides CBP’s detentions and the Ethiopia inquiry, four more overhangs landed after the June peak:

Still, TOYO doubled its Texas module capacity to 2 GW and signed ~$240M of binding module contracts since mid-June.

TOYO also generated $61.4M of operating cash flow in H1 2026 and had $26.4M of net cash as of June 30. Moreover, management expects $140M/year of U.S. manufacturing tax credits at full Texas output, 85.6% of TOYO’s market cap, and leaves those credits out of its forecasts.

So is TOYO a profitable non-Chinese cell maker on sale, or is the market right that Ethiopia’s U.S. sales won’t last?

In this ~6,600-word deep dive, I cover where TOYO’s cells come from and who buys them, the four U.S. trade actions now hanging over its Ethiopian cells, the Texas plant meant to answer them, and the delisted parent that still signs off on TOYO’s major investments. Then I conclude with the valuation at $3.83/share and whether I’m buying.

TOYO manufactures solar cells, the processed silicon wafers that turn sunlight into electricity, and assembles some of them into panels (modules). Its cells use TOPCon (tunnel oxide passivated contact), a common high-efficiency silicon cell design.

TOYO runs three factories, shown below with the 1.5 GW cell plant it plans to add in Texas:

VSUN (Vietnam Sunergy JSC) is the Vietnamese panel maker TOYO was carved out of, and both companies sit under the same majority shareholder, Abalance, a Japanese solar group.

VSUN is still TOYO’s lender, owed $51.4M including interest, and a past wafer supplier through its Chinese subsidiary.

TOYO was incorporated in November 2022 to separate VSUN’s cell and module businesses and later bought VSUN’s Vietnamese cell plant for at least $50M. It listed on Nasdaq on July 1, 2024, by merging with Blue World Acquisition Corp, a SPAC.

TOYO’s July investor deck lays out the build-out since its founding:

TOYO’s $261.0M of H1 2026 revenue came from four lines:

TOYO’s largest customer, an outside company it doesn’t name, made up 35% of H1 2026 revenue.

Upstream, 70% of the polysilicon (the refined silicon that wafers are cut from) in TOYO’s Ethiopian cells comes from a U.S. producer and the rest from OCI’s plant in Malaysia, Rhone Resch, TOYO’s Chief Strategy Officer, said on the Q2 call.

In January, TOYO signed a one-year supply contract with what it calls “the leading polysilicon producer in the United States.”

Resch also said its 2026 wafers come from non-China production, “including a designated facility in Indonesia.”

TOYO markets its supply chain as “non-FEOC,” free of any foreign entity of concern. If you’ve read my Fluence write-up, you’ll know why U.S. buyers care, since the One Big Beautiful Bill Act (OBBBA) denies the main clean-power tax credit to projects with too much equipment from Prohibited Foreign Entities, a label aimed at Chinese suppliers.

Making its cells in Ethiopia let TOYO sell to U.S. buyers again without paying the duties on Vietnamese cells, but those cells now face four U.S. actions at once:

I’ll go through each one below.