LDK Solar on Monday slashed its sales and shipment estimates for the fourth quarter of 2008 and is now expecting a lackluster 2009, news that caused its stock to plunge by 15 percent.

The Chinese maker of silicon wafers, which are turned into solar cells for making solar panels, said preliminary data showed that it likely generated $425 million to $435 million for the quarter that ended in December, instead of the previously anticipated $555 million to $565 million.

LDK (NYSE: LDK) said it also shipped an estimated 245 megawatts to 255 megawatts worth of wafers during the quarter, down from the 260 megawatts to 270 megawatts.

Recession and customers who wanted to delay delivery prompted the lower sales, the company said. LDK plans to announce full fourth-quarter and 2008 financial results in late February or early March.

The revised estimates underscore how declining prices are whacking the solar industry. The company reduced revenue estimates by around 23 percent but lowered shipment by only 5 percent. Thus, prices are dropping far faster than any decline in actual demand for products.

The situation could get worse in 2009 as it completes manufacturing projects while facing declining demand.

LDK launched ambitious plans to build two factories in China for producing polysilicon, the main ingredient for making wafers, over the past year and half. The two polysilicon factories are LDK's first efforts to make polysilicon instead of relying on outside suppliers (see LDK Silicon Confirms Plant Is on Track).

But LDK is having trouble bringing its first factory into full production mode, the company said Monday. The 1,000-metric ton factory was supposed to be completed and running at capacity by the end of 2008. The factory is producing polysilicon, but it isn't likely to reach full production until mid 2009.

LDK blames problems with the "optimization process" for the delay but didn't provide more details. Calls and emails to the company weren't immediately returned.

The company said the construction of its second polysilicon plant is on track. LDK expects the 15,000-metric ton factory to begin production in the second quarter of 2009.

The outlook for 2009 isn't rosy. LDK expects lower average selling prices for its products and lower wafer shipment this year.

For 2009, it expects to generate between $2.3 billion and $2.5 billion in sales. Shipment could reach between 1.57 gigawatts and 1.67 gigawatts. 

The company previously thought it would bring in between $2.9 billion and $3.1 billion in sales and ship between 1.8 gigawatts and 1.85 gigawatts worth of wafers in 2009. Its customers include Q-Cells, Suntech Power Holdings and Canadian Solar.

LDK now expects to produce between 3,000 metric tons and 5,000 metric tons of polysilicon instead of 5,000 metric tons to 7,000 metric tons.

The company's annual wafer capacity would reach 2.3 gigawatts in 2009, an estimate that hasn't changed from the prior forecast.

LDK's shares dropped more than 15 percent to reach $12.61 per share in after-market trading. The company announced the lower sales and forecast after the market closed.