This quarterly report on Form 10-Q contains "forward-looking statements" that involve risks and uncertainties, as well as assumptions that, if they prove incorrect or never materialize, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are often identified by the use of words such as, but not limited to, "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "will," "plan," "target," "continue," and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified under the section titled "Risk Factors" below, and those discussed in the section titled "Risk Factors" included in our Prospectus dated July 23, 2008 filed pursuant to Rule 424(b) under the Securities Act with the Securities and Exchange Commission on July 24, 2008. Furthermore, such forward-looking statements speak only as of the date of this report. All forward-looking statements are qualified in their entirety by this cautionary statement, and we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Company Overview

GT Solar International, Inc., through its subsidiaries (referred to herein collectively as "we", "us", and "our"), is a provider of specialized manufacturing equipment and services essential for the production of photovoltaic, or PV, wafers, cells and modules and polysilicon. Our principal products are directional solidification systems, or DSS units, and chemical vapor deposition, or CVD, reactors and related equipment. DSS units are specialized furnaces used to melt polysilicon and cast multicrystalline ingots from which solar wafers are made. CVD reactors are used to react gases at high temperatures and pressures to produce polysilicon, the key raw material used in solar cells. Our customers include several of the world's largest solar companies as well as companies in the chemical industry. The use of our products requires substantial technical know-how and most of our customers rely on us to design and optimize their production processes as well as train their employees in the use of our equipment. We operated through two segments: our PV business and our polysilicon business.

Our PV business manufactures and sells DSS units, wafer cleaning and etch systems, slurry recovery systems, cell testing and sorting equipment, and tabber/stringer machines, as well as related parts and consumables. We sell our products separately and as part of "turnkey solutions," where we bundle equipment, including third party equipment, with design and integration expertise.

Our polysilicon business offers CVD reactors and related equipment. In 2005, we made a strategic decision to develop the equipment and expertise necessary to facilitate the entry of new participants into the polysilicon industry.

Our business was founded in 1994. Effective January 1, 2006, our business was acquired by GT Solar Holdings, LLC, a newly formed company controlled by GFI Energy Ventures LLC, a private equity investment firm focused on the energy sector and Oaktree Capital Management, L.P., a global alternative and non-traditional investment manager. We refer to this transaction as the "Acquisition."

On July 29, 2008, we completed an initial public offering of 30,300,000 shares of common stock by certain of our stockholders.

Order Backlog

    Our order backlog consists of signed purchase orders or other written
contractual commitments. The table below sets forth our order backlog as of
September 27, 2008 and March 31, 2008 by product category:

                                          As of                     As of
                                   September 27, 2008           March 31, 2008
                                                  % of                     % of
         Product Category          Amount        Backlog      Amount      Backlog
                                              (dollars in millions)
         PV business             $       541           38 %  $     648          50 %
         Polysilicon business            873           62 %        659          50 %

         Total                   $     1,414          100 %  $   1,307         100 %

Our order backlog as of September 27, 2008 included deferred revenue of $274.8 million, representing equipment that had been shipped to customers but not yet recognized as revenue. In addition, $732.5 million of our order backlog as of September 27, 2008 was attributed to three customers. We generally would expect to deliver the solar products included in our order backlog over a period ranging from six to twelve months and the polysilicon products included in our order backlog over a period ranging from twelve to eighteen months, although portions of the related revenue are expected to be recognized over a longer period. We expect to convert approximately 25% to 30% of our order backlog as of September 27, 2008 to revenue by March 31, 2009. Order backlog as of any particular date should not be relied upon as indicative of our revenues for any future period and we have only recently begun to track our order backlog on a consistent basis.

Recent developments in the global capital markets have resulted in a higher level of uncertainty experienced by some end-user solar cell module manufacturers. Although we continue to believe that our backlog is somewhat insulated from these recent trends due to our requirement for substantial non-refundable deposits on most orders, we have been notified by a few of our customers who are seeking to renegotiate the delivery schedules under their existing contracts with us. As of the date of this filing, we have not had any significant cancellations or modifications to our contracts in backlog.

Factors Affecting Our Results of Operations

Demand for our products and services is driven by end-user demand for solar power. Key drivers of the growing demand for solar power include increasing scarcity and prices of conventional energy sources, the desire for energy security or energy independence to counter perceived geopolitical supply risks surrounding fossil fuels, environmental pollution from fossil fuels and the resulting tightening of emission controls, the increasingly competitive cost of energy from renewable energy sources, government incentive programs for the development of solar energy making solar energy more cost competitive and changing consumer preferences towards renewable energy sources.

In addition, our results of operations are affected by a number of external factors including the availability and price of polysilicon in the market, availability of raw materials, foreign exchange rates, interest rates, commodity prices (particularly steel and graphite prices), macro economic factors, including the availability of capital that may be needed by our customers and political, regulatory and legal conditions in the markets in which we conduct business (including China).

Our results of operations are also affected by a number of additional factors including, among other things, the size of new contracts and when we are able to recognize the related revenue (especially with respect to our polysilicon products), delays in customer acceptances of our products, delays in deliveries of ordered products and our rate of progress in the fulfillment of our obligations under our contracts. Our quarterly results have fluctuated significantly in the past and we expect that our quarterly results will continue to fluctuate significantly in the future.

Results of Operations

    The following tables set forth the results of operations as a percentage of
revenue for the three and six months ended September 27, 2008 and September 30,
2007:

                                     Three Months Ended                    Six Months Ended
                              September 27,      September 30,     September 27,      September 30,
                                  2008               2007              2008               2007
Statement of Operations
Data:*
Revenue                                  100 %              100 %             100 %              100 %
Cost of revenue                           56                 64                57                 64

Gross profit                              44                 36                43                 36
Research and development                   3                  2                 4                  3
Selling and marketing                      4                  4                 4                  6
General and administrative                 6                  5                 8                  9
Amortization of intangible                 1                  1                 1                  1
assets

Income from operations                    31                 23                26                 16
Interest income, net                       2                  2                 2                  2
Other expense, net                        (1 )                -                (1 )               (1 )

Income before income taxes                31                 25                27                 17
Provision for income taxes                11                  4                10                  5

Net income                                20 %               21 %              17 %               12

Three and Six Months ended September 27, 2008 compared to Three and Six Months Ended September 30, 2007.

Revenue. The following table sets forth total revenue and revenue by product category for the three and six months ended September 27, 2008 and September 30, 2007:

                                         Three Months Ended                   Six Months Ended
                                  September 27,      September 30,     September 27,     September 30,
Product Category                       2008              2007              2008              2007
                                       (dollars in thousands)              (dollars in thousands)
PV equipment                       $      135,006    $       74,010    $      189,510    $       88,486
PV services, parts and other                5,186             7,764             7,764             8,644

   Total PV business revenue       $      140,192    $       81,774    $      197,274    $       97,130

For the three months ended September 27, 2008 compared to the three months ended September 30, 2007, our total revenue increased 71.4%, or $58.4 million. Specifically, our revenue from PV equipment sales increased 82.4% from $74.0 million for the three months ended September 30, 2007 to $135.0 million for the three months ended September 27, 2008. During the three months ended September 27, 2008, our revenue from DSS sales was $129.1 million, compared to $58.3 million in the same quarter last year. Sales of other solar equipment accounted for $5.9 million and $15.7 million of our revenue for the three months ended September 27, 2008 and September 30, 2007, respectively.

For the six months ended September 27, 2008 compared to the six months ended September 30, 2007, our total revenue increased 103.1%, or $100.1 million. During the six months ended September 27, 2008, our revenue from DSS sales was $180.1 million compared to $72.6 million in the same period last year.

Sales of other solar equipment accounted for $9.4 million and $15.9 million of our revenue for the six months ended September 27, 2008, and September 30, 2007 respectively.

Revenue from PV services, parts and other equipment sales can fluctuate based upon specific customer requirements. Overall revenue increases were primarily related to our PV equipment including sales of our next generation DSS furnaces. As of September 27, 2008, we had deferred revenue of $119.7 million attributable to PV contracts.

Our polysilicon business commenced in April 2006, and as of the three and six months ended September 27, 2008 and September 30, 2007 we had not recognized any revenue from our CVD reactors or converters. As of September 27, 2008, we had delivered CVD reactors to certain customers. However, revenue will be recognized related to these orders when pre-established reactor output performance criteria have been met and final acceptance by the respective customer has been confirmed. As of September 27, 2008, we had deferred revenue of $155.1 million attributable to polysilicon contracts.

In the three and six months ended September 27, 2008 and three and six months ended September 30, 2007, a substantial percentage of our revenue resulted from sales to a small number of customers. Three of our customers accounted for 77% and 70% of our revenue for the three and six months ended September 27, 2008, and one customer accounted for 96% of our revenue for the three months ended September 30, 2007 and two customers accounted for 90% of our revenue for the six months ended September 30, 2007. No other customer accounted for more than 10% of our revenue during the respective periods. For the fiscal year ended March 28, 2009, we believe that no one customer will account for more than 25% of our total annual revenue.

Cost of Revenue and Gross Profit. The following table sets forth total cost of revenue and gross profit (loss) for the three and six months ended September 27, 2008 and September 30, 2007:

                                      Three Months Ended                   Six Months Ended
                               September 27,      September 30,     September 27,     September 30,
                                    2008              2007              2008              2007
                                    (dollars in thousands)              (dollars in thousands)
Cost of revenue
  PV business                   $       78,563    $       52,190    $      111,783    $       62,224
  Polysilicon business                     258                 -              (177 )               -

  Total                         $       78,821    $       52,190    $      111,606    $       62,224

Gross profit (loss)
  PV business                   $       61,629    $       29,584    $       85,491    $       34,906
  Polysilicon business                    (258 )               -               177                 -

  Total                         $       61,371    $       29,584    $       85,668    $       34,906

Cost of revenue increased $26.6 million, or 51.0%, to $78.8 million for the three months ended September 27, 2008 compared to $52.2 million for the three months ended September 30, 2007. Gross profit increased $31.8 million, or 107.4%, to $61.4 million for the three months ended September 27, 2008 compared to gross profit of $29.6 million for the three months ended September 30, 2007. Gross profit as a percentage of revenue, or gross margin, increased to 43.8% for the three months ended September 27, 2008 from 36.2% for the three months ended September 30, 2007. Gross margin increased due primarily to the higher gross margins on our DSS units that were introduced during the second quarter of fiscal 2008 and higher costs in the three months ended September 30, 2007 of approximately $6.5 million due to the impact of a non-recurring purchase accounting fair value adjustment and higher than expected costs on a completed turnkey contract.

Cost of revenue increased $49.4 million, or 79.4%, to $111.6 million for the six months ended September 27, 2008 compared to $62.2 million for the six months ended September 30, 2007. Gross profit

for the six months ended September 27, 2008 increased $50.8, or 145.4%, to $85.7 million compared to $34.9 million for the six months ended September 30, 2007. Gross margin increased to 43.4% for the six months ended September 27, 2008 from 35.9% for the six months ended September 30, 2007. Gross margin increased due primarily to the higher gross margins on our DSS units that were introduced during the second quarter of fiscal 2008 and higher costs in the six months ended September 30, 2007 of approximately $6.5 million due to the impact of non-recurring charges as noted above.

For the balance of the fiscal year ending March 28, 2009, we anticipate our revenue will include higher revenue from other equipment sales, turnkey projects and polysilicon reactors, all of which are expected to slightly reduce overall gross margins compared to those of our DSS units.

Research and Development. The following table sets forth total research and development expenses for the three and six months ended September 27, 2008 and September 30, 2007:

                                       Three Months Ended                    Six Months Ended
                                September 27,      September 30,      September 27,     September 30,
                                    2008                2007              2008              2007
                                     (dollars in thousands)               (dollars in thousands)
Research and development
   PV business                   $       2,066       $         689     $       3,522     $       1,178
   Polysilicon business                  1,983               1,157             4,343             1,751

   Total                         $       4,049       $       1,846     $       7,865     $       2,929

Research and development expenses increased 119.3%, or $2.2 million, during the three months ended September 27, 2008 compared to September 30, 2007. Of this increase, approximately $0.9 million relates to outside consulting services related to the continued development of our CVD reactor technology and the development of our next-generation DSS products and $0.7 million related to increased purchases of R&D material during the quarter.

During the six months ended September 27, 2008 compared to September 30, 2007, research and development expenses increase by approximately 168.5%, or $4.9 million. Of the year-to-date increase in research and development expenses, approximately $1.8 million can be attributed to increased material spending and outside consulting services associated with the development of new Polysilicon business products, particularly our CVD reactor technology, as well as costs associated with the development of our next-generation DSS products. Additional cost increases relate to payroll and benefits related to increased headcount as we continued to grow and expand.

Selling and Marketing. The following table sets forth total selling and marketing expenses for the three and six months ended September 27, 2008 and September 30, 2007:

                                      Three Months Ended                    Six Months Ended
                               September 27,      September 30,      September 27,     September 30,
                                   2008                2007              2008              2007
                                    (dollars in thousands)               (dollars in thousands)
Selling and marketing
  PV business                   $       2,677       $       1,676     $       4,916     $       4,029
  Polysilicon business                  2,367               1,671             3,912             2,235

  Total                         $       5,044       $       3,347     $       8,828     $       6,264

Selling and marketing expenses increased 50.7%, or $1.7 million, during the three months ended September 27, 2008 compared to September 30, 2007 primarily all of which related to increases in third party commissions. However, sales commissions do not directly correlate to increases in revenue since sales

commissions are accrued based on operational factors such as deposits, shipments and final acceptances received from customers rather than when revenue is recognized.

During the six months ended September 27, 2008 compared to September 30, 2007, selling and marketing expenses increased 40.9%, or $2.6 million, of which the majority can be attributed to increased third party sales commissions of approximately $2.2 million. As noted above, sales commissions do not directly correlate to increases in revenue since sales commissions are accrued based on operational factors such as deposits, shipments and final acceptances received from customers rather than when revenue is recognized. Additionally, year-to-date selling and marketing expenses increased as a result of increased headcount as we continued to grow and expand.

General and Administrative. The following table sets forth total general and administrative expenses for the three and six months ended September 27, 2008 and September 30, 2007:

                                       Three Months Ended                     Six Months Ended
                                September 27,      September 30,      September 27,      September 30,
                                    2008                2007               2008              2007
                                     (dollars in thousands)                (dollars in thousands)
General and administrative
   PV business                   $       7,696       $       4,447     $       14,867     $       8,870
   Polysilicon business                    652                   -              1,257                 -

   Total                         $       8,348       $       4,447     $       16,124     $       8,870

General and administrative expenses increased 87.7%, or $3.9 million during the three months ended September 27, 2008 compared to September 30, 2007. The most significant factors affecting this increase include spending related to legal and tax consulting services of approximately $1.5 million, as well as, increased software consulting costs of $1.0 million related to the implementation of a new ERP system.

During the six months ended September 27, 2008 compared to September 30, 2007, general and administrative expenses increase by 81.8%, or approximately $7.3 million. The most significant factors affecting this increase relates to stock compensation expense, as compared to prior periods, which increased $2.1 million primarily due to the variable nature of awards granted to non-employees. Additionally, on a year-to-date basis, the Company incurred spending of approximately $2.0 million related to legal and tax consulting services, as well as, increased software consulting costs of $1.2 million related to the implementation of a new ERP system.

Amortization of Intangible Assets. Amortization expense attributed to intangible assets has remained essentially unchanged for all periods presented.

Interest Income and Interest Expense. We typically invest our excess cash in exchange-traded money market mutual funds. During the three and six months ended September 27, 2008 and 2007, we recorded $2.5 million and $4.0 million and $1.9 million and $3.4 million of interest income, respectively. During the three and six months ended September 30, 2008 and 2007, we recorded $0.1 million and $(0.2) million and $0.7 million and $1.1 million related to the interest component of foreign exchange forward contracts.

Other Expense, net. During the three and six months ended September 27, 2008, other expense was $1.7 million and $3.1 million, respectively, and during the three and six months ended September 30, 2007, other expense was $0.2 million and $1.3 million, respectively, related primarily to our initial public offering which was completed on July 29, 2008.

Provision for Income Taxes. Our effective income tax rate was 36.3% for the three months ended September 27, 2008, compared to 15.8% for the comparable prior-year period. For the six months ended September 27, 2008, our effective tax rate was 36.9%, compared to 26.7% for the same period ended September 30, 2007. The effective rate for both the three months ended and six months ended

September 27, 2008 was lower than the statutory rate due primarily to the impact of discrete items, mainly attributed to tax benefits based upon recently completed tax studies. The impact of these discrete items was to reduce the effective rate for the six month period ended September 27, 2008 by a net of 1.7%. In the six month period ended September 30, 2007, the effective rate included the reversal of a prior valuation allowance against the deferred tax assets of $3.0 million.

Net Income. As a result of the foregoing factors, for the three and six months ended September 27, 2008, we recorded net income of $27.9 million and $33.1 million, respectively, compared to net income of $17.1 million and $12.0 million for the three and six months ended September 30, 2007.

Liquidity and Capital Resources

Overview

Overall our cash balances decreased by $48.4 million during the six months ended September 27, 2008, from $54.8 million as of March 31, 2008 to $6.4 million as of September 27, 2008. During the six months ended September 30, 2008 our cash balance decreased by $30.5 million, from $74.1 million as of March 31, 2007 to $43.6 million as of September 30, 2007. In the six months ended September 27, 2008, the cash decrease was related primarily to the payment of a dividend in the amount of approximately $90 million. We manage our cash inflows through the use of customer deposits and milestone billings that allow us in turn to meet our cash outflow requirements, which consist primarily of vendor payments and prepayments for contract related costs (raw material and components costs) and payroll and overhead costs as we perform on our customer contracts. The following discussion of the changes in our cash balance refers to the various sections of our Condensed Consolidated Statements of Cash Flows, which appears in Item 1 of this quarterly report on Form 10-Q.

Cash Flows from Operating Activities

We generated $47.5 million of cash from operations during the six months ended September 27, 2008, compared to $13.5 million of cash used in operations for the same period last year. The increase in customer deposits of . . .