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MEMC scores $3B solar deal

Posted: 30 Oct 2006 ?? ?Print Version ?Bookmark and Share

Keywords:MEMC Electronic Materials? Gintech Energy? solar cells? Mark LaPedus?

MEMC Electronic Materials Inc. has signed a deal worth up to $3 billion with startup Gintech Energy Corp. of Taiwan, its second major customer in the solar arena.

Under the terms, MEMC will supply solar wafers to solar-cell maker Gintech over a 10-year period, with pre-determined pricing, on a take or pay basis beginning in the second half of 2007.

Sales of the wafers over the 10-year period are expected to generate between $2.5-to-$3 billion in revenue for MEMC. As part of the definitive agreement, Gintech will advance funds to MEMC, in the form of an interest-free loan or security deposit, which will be used for expansion of its manufacturing capacity. The company will also be eligible to purchase a 10 percent interest in Gintech, as well as acquire the rights to an approximate 1.7 hectare parcel of land located within the Hsinchu Science Park.

"With this announcement, MEMC now has agreements to supply solar wafers worth between $7-$9 billion dollars in revenue over the next decade," said Nabeel Gareeb, MEMC's chief executive, in a statement.

In July, MEMC said that it has discontinued its short-lived solar wafer agreement with Motech Industries Inc. of Taiwan and will instead work with rival Suntech Power Holdings Ltd of China. Motech is the largest solar-cell maker in Taiwan, while Suntech is the biggest in China.

The company supply solar wafers to Suntech over a 10-year period. Sales of the wafers over the 10-year period are expected to generate between $5 billion and $6 billion in revenue for MEMC. In addition, MEMC has received a warrant to purchase an approximately 4.9 percent equity stake in Suntech.

MEMC inked the deal with Suntech for good reason. Fueled by a new national renewable energy policy, China is moving towards a huge solar production ramp on all fronts of the domestic supply chainpolysilicon feedstock, wafers, cells and modules.

- Mark LaPedus
EE Times

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