Chinese solar panel giant Trina Solar is strategically planning to construct its third factory in Vietnam, a move aimed at ramping up exports to the United States following anticipated punitive duties on products manufactured in Thailand.

Trina Solar, a leading solar panel maker globally in terms of sales, is set to invest a substantial $400 million in this new plant, occupying a 25-hectare area of industrial land. Production at the factory is slated to commence in 2025, Reuters news report said.

This strategic investment comes in the wake of an investigation by the U.S. Department of Commerce , which concluded recently that Trina, among five other Chinese solar firms, utilized their facilities in Thailand and other Southeast Asian nations to evade punitive tariffs imposed on Chinese-made panels. The U.S. claims that these panels benefit from unfair state subsidies.

While the impending tariffs, slated to take effect in the middle of the following year, currently affect Trina’s Thailand operations, the widespread practice of Chinese companies establishing facilities in Southeast Asia for exporting to the U.S. remains under close scrutiny.

In the Southeast Asian region, the top-producing countries account for approximately 80% of U.S. panel supplies, with Vietnam contributing about one-third of all U.S. imports of solar panels in the first quarter of this year, according to data from S&P Global Market Intelligence.

Trina Solar is already a significant player in Vietnam’s solar panel manufacturing landscape and this planned investment underscores the growing interest of Chinese businesses in setting up factories in the country, strategically avoiding escalating geopolitical and trade tensions between Beijing and Washington.

China stands as the second-largest foreign investor in Vietnam for the current year, injecting a significant $2.7 billion into its neighboring country from January to mid-August. This figure is more than five times the value of investments made by U.S. companies during the same period, as per Vietnamese government data.

Currently, Trina operates two plants in Vietnam, one of which began producing silicon wafers last month, with an anticipated annual output of 6.5 gigawatts (GW). The other facility manufactures solar cells and panels. This latest investment signifies Trina Solar’s strategic growth and its determination to navigate the evolving trade landscape, ensuring continued growth and export viability.

Trina Solar has reported revenue of $7.13 billion from PV products, PV systems and smart energy in the six months to June 30. Trina Solar’s shipments of modules totaled 27GW in the first half of 2023, ranking second globally, and accumulated shipments of modules exceeded 150GW, with shipments of 210mm modules surpassing 75GW.