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China PV cell maker buys silicon wafer provider

Posted: 03 Aug 2007 ?? ?Print Version ?Bookmark and Share

Keywords:photovoltaic cells? silicon wafer? polysilicon?

Photovoltaic cell and module manufacturer Solarfun Power Holdings Co. Ltd has entered into an agreement to acquire 52 percent equity interest in Jiangsu Yangguang Solar Technology Co. Ltd for approximately $8 million from Nanjing Linyang Electric Power Investment Co. Ltd.

Yangguang Solar is a provider of silicon wafer and was founded by Jiangsu Zhongneng PV Technology Development Co. Ltd, a polysilicon supply company in China. Zhongneng sold 70 percent equity interest in Yangguang Solar to Linyang Electric and a 30 percent interest to Lianyungang Suyuan Group Co. Ltd in June 2007.

Yangguang plans to commence operations in October 2007 with an annual production capacity of 15-20mW of 5-inch silicon wafers. Total production in 2007 is expected to be 3-5mW. Yangguang Solar intends to install additional equipment to enable it to gradually move to 6-inch silicon wafer production in 2008. Total production capacity is expected to be 60-80mW in 2008, with expected annual production of 50-60mW.

Yangguang has secured 1,950 tons of polysilicon supply over a three-year period from Zhongneng. The agreement calls for delivery of 50 tons in 2007, 700 tons in 2008 and 1,200 tons in 2009. Solarfun has the option to acquire all or any portion of the wafers produced by Yangguang Solar if the products meet Solarfun's testing standards.

This acquisition provides Solarfun with an additional source for silicon wafers, as well as strategic flexibility to expand into additional segments of the solar industry value chain in the future, while minimizing near-term capital requirements.

"This acquisition is a very positive strategic development for Solarfun," said Yonghua Lu, chairman and CEO of Solarfun. "It allows us to secure access to a steady supply of silicon wafers at a reasonable price. Moreover, in an industry where quality is paramount, competition intense, and raw materials often in short supply, acquiring Yangguang Solar ensures that we will be able to provide our customers with top quality products at a competitive price."

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