Suntech Power Holdings, one of the world’s biggest solar panel suppliers, announced Friday that it would stop producing thin film solar cells and concentrate solely on older Crystalline Silicon cells.

Suntech, a China-based company, has long been the world’s biggest producer of Crystalline Silicon cells, but recently acquired other companies, such as Shunda, and machinery used for producing what industry leaders have speculated will be more efficient and affordable thin-film technology.

Crystalline Silicon has been used for decades to build solar cells. But the material is a relatively poor absorber of light and requires significant thickness (several hundred microns) to create effective solar cells.

Suntech began experimenting and investing in thin-film technology along with its many competitors.

The company cited the rapid reduction and improving competitiveness of crystalline silicon solar panels as the causes for its decision to stop producing the less-trusted and understood thin-film cells.

Suntech has experienced increased sales and demand for crystalline silicon cells as solar panel sales in Europe and the United States have increased, according to a press release issued by the company Friday.

Along with the news of its plans to stop thin-film panel production, Suntech warned investors to expect poor earnings statements as the company pays for its abandoned experiment.

Suntech expects, according to the press release, to incur a thin film equipment non-cash impairment charge of approximately $50 million to $55 million in the second quarter of 2010.

Yet Dr. Zhengrong Shi, Suntech's chairman and CEO said he believes the decision will ultimately benefit the company’s financial health.

"While the thin-film and Shunda related charges will significantly impact our second quarter financial results, they have no bearing on our core manufacturing operations which are performing very well,” Shi said. “Going forward, we will continue to focus on our primary mission of supplying the most reliable and high performance solar panels in the industry."