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Suntech inks $678M polysilicon supply pact with Hoku

Posted: 19 Jun 2007 ?? ?Print Version ?Bookmark and Share

Keywords:polysilicon? manufacturing capacity? supply pact?

Sanyo, Hoku ink polysilicon deal" target=_blank>Hoku Materials and Suntech Power Holdings Co. Ltd have entered into a contract for Hoku's sale and delivery of polysilicon to Suntech over a 10-year period beginning mid-2009.

Approximately $678 million may be payable to Hoku during the 10-year period, subject to the achievement of milestones, the acceptance of product deliveries and other conditions. The contract also provides for the delivery of predetermined volumes of polysilicon each year at set prices, using a take-or-pay approach, beginning with the first shipment in 2009 and continuing over a ten-year period from the first shipment.

"Securing a long-term supply of polysilicon from Hoku will enable us to continue to expand our manufacturing capacity and execute on Suntech's strategic plan," said Zhengrong Shi, Suntech's chairman and CEO.

China-based Suntech started construction on a solar cell plant in Shanghai in May. The first phase of the new plant is expected to begin operation in 2008 and will reach 50MW of thin-film solar cell production capacity in 2009.

Hoku is in the process of building a plant capable of producing 2,000 metric tons of polysilicon per year in Pocatello, Idaho. The Hawaii-based company announced in January the signing of a seven-year polysilicon supply contract with Sanyo Electric Co. Ltd that would provide for approximately $370 million in payments to Hoku.

Meanwhile, industry watchers predict the polysilicon shortage could persist up to 2012, due to the booming demand in the solar cell sector.

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