TOYO Co., Ltd. has announced a $357 million capital investment to construct a 1.5 GW N-type heterojunction (HJT) solar cell manufacturing facility in the Houston metropolitan area. 

The project co-locates cell production with its existing Texas module plant to secure Section 45X tax credits and establish a fully integrated, domestic content-compliant U.S. supply chain. The integration is designed to shorten production cycles from raw wafer processing to finished modules. 

Engineering, facility design, and procurement planning are already underway, with full project completion and initial pilot production expected within the next 20 months. Utilizing the existing Houston site infrastructure mitigates greenfield development risks, streamlines local permitting processes, and allows the company to leverage its existing regional management team and labor pool, said the company. 

This latest expansion represents TOYO’s official entry into domestic U.S. cell manufacturing, a move heavily incentivized by the structural design of the Inflation Reduction Act (IRA). Under current U.S. framework guidelines, domestic cell manufacturing qualifies for direct Advanced Manufacturing Production Credits under Section 45X of the IRA, which provide $0.04 per watt for domestically produced solar cells. At full 1.5 GW capacity, this single facility stands to capture up to $60 million in annual production tax credits. 

Beyond direct 45X benefits, co-locating cell and module lines allows TOYO to offer developers a fully “domestic content” compliant product. This enables project buyers to secure the 10% domestic content bonus tax credit under the Investment Tax Credit (ITC) and Production Tax Credit (PTC) frameworks, which serves as a critical competitive advantage as developers increasingly reject modules reliant on imported cells.  

“Expanding into domestic cell manufacturing is the natural next step in our commitment to creating an integrated onshore solar supply chain from polysilicon to panels,” said Takahiko Onozuka, Chairman and CEO of TOYO. “Co-locating 1.5 GW of HJT cell capacity at our Houston module site significantly optimizes our capital allocation and infrastructure spend.” 

The announcement marks the next phase of a multi-year pivot away from tariff-exposed regions. TOYO initially announced its entry into the U.S. downstream market in late 2024 with a 2 GW panel assembly factory in Texas. However, as trade barriers evolved, assembly alone proved insufficient to insulate the manufacturer from geopolitical headwinds. 

To guarantee compliance under Foreign Entity of Concern (FEOC) rules and AD/CVD trade regimes, the company has had to rework its upstream pipeline. Early this year, TOYO secured a strategic supply contract with an unnamed U.S. polysilicon manufacturer. By feeding U.S.-sourced polysilicon into its cell production, the company aims to create a dual-source supply chain capable of withstanding shifting U.S. customs enforcement. 

The company continues to defend its global footprint against trade friction. A coalition of domestic U.S. manufacturers has scrutinized the TOYO’s international operations, alleging tariff circumvention. TOYO strictly denies these Ethiopia duty evasion claims, countering that its 4 GW cell facility in Ethiopia operates transparently while confirming that shifting midstream cell operations to Houston serves as a hedge against trade litigation. 

While scaling its North American footprint, TOYO has maintained a presence as an upstream partner in other Western markets. In late 2025, the manufacturer struck a solar cell supply deal with French module producer Voltec Solar, proving its ability to service the European market with high-efficiency cells even as it anchors its primary capital expansion in the American Sunbelt. 

The Houston plant will focus on producing next-generation N-type heterojunction (HJT) cells. This HJT technology establishes a new benchmark for power density by combining industry-leading conversion efficiencies, frequently exceeding 25%, with very low annual degradation rates. Engineered for maximum yield, HJT cells feature improved bifaciality and temperature coefficients, supporting high power production even in extreme heat. 

In the U.S. market, where fixed infrastructure, land, labor, and installation costs are high, maximizing efficiency is critical. TOYO’s high-density HJT technology dilutes these fixed upfront balance-of-system expenses by generating more megawatt-hours per acre, directly improving project returns for developers. 

The $357 million investment represents a substantial capital commitment relative to TOYO’s current market capitalization of $579 million. In its Q1 2026 financial results, TOYO posted revenues of $142.8 million, a 177% year-over-year increase, and generated a record net income of $28.4 million, driven by the scale-up of its international cell lines. 

The company expects to fund the Houston construction through a mixture of internal cash flow, non-dilutive project financing, potential strategic partnerships, and selective equity financing. The new facility is expected to create approximately 400 direct full-time manufacturing jobs in the Houston metropolitan area, with an estimated 1200 additional jobs across the regional supply chain.