Shares of CSI Solar dropped as the world’s fifth-largest solar panel supplier revealed a new CNY900 million (USD126.4 million) investment plan despite investors' worries about overcapacity.

Shanghai-listed CSI Solar [SHA: 688472] closed 3.7 percent lower at CNY11.87 (USD1.70), falling closer to the initial public offering price of CNY11.1. It went public in June.

CSI Solar, a Chinese subsidiary of Canadian Solar, will establish a new plant in its photovoltaic base in Jiangsu province's Yangzhou to add an annual production capacity of 14 gigawatts of large monocrystalline silicon wafers to complete the company's industry chain, the Chinese arm of the Ontario-headquartered solar module giant announced yesterday. After that, the firm will make everything from raw materials, cells, and modules in one place for higher efficiency.

The project's construction period is expected to be one year, the company added, without giving more details about the undertaking.

"Expand or die" is the dilemma that Chinese PV firms are facing, an industry insider said to Yicai. PV suppliers keep widening their production capacity amid fears of being replaced by more advanced technologies even though investors worry about excess capacity.