Trade affects countries not only through finished products but raw materials as well. There is competition and companies strive to outdo their competitors. Some do it through comparative advantage, others through price advantage. Solyndra tried to stand out through quality products that could be offered at a lower price than their competitors for China. The sought this out by producing a state of the art factory that would produce solar panels with better technology and design. With all of this technology they are able to produce the panels at a price that would make them cheaper than the panels coming out of China. As we talked about in class technology is a factor that can give countries a comparative advantage when it comes to price and production.
Even though Solyndra would be able to produce solar panels at a lower price attributed to their technology, a swing in the raw material cost shut them down. In 2008 the price of silicon was around $400 a kilogram. After much investment in polysilicon and a huge oversupply prices the price is in the low 20s. Solyndra made solar panels that didn't require silicon as a key ingredient. Chinese manufacturers had such high costs because of their use of silicon. Yet after the production of polysilicon, prices for Chinese panels made with silicon plummeted. This caused Solyndra and several other solar panel producers to go out of business.
Through trade, technology, and the enhancement of raw materials prices are affected. Solyndra had a comparative advantage to start due to their increased technology, yet fell because of the improvements in raw materials. Trade and overproduction may be helping the production of solar panels but as seen it is seriously affecting the price of polysilicon.
http://blogs.wsj.com/corporate-intelligence/2012/10/12/solyndra-claiming-foul-sues-its-chinese-rivals/?mod=WSJBlog&mod=WSJ_corp_intel
http://www.pv-magazine.com/news/details/beitrag/pv-polysilicon-prices-continue-to-plummet_100008512/#axzz297rSMfep
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