Suntech Announces Silicon Wafer Purchase Agreement

Suntech Power Holdings Co., Ltd. announced today that it has entered into an agreement with Sunlight Group Inc. to purchase silicon wafers over a five-year period. Sunlight is headquartered in the U.S. with China and Japan-based production.

Based on existing contract prices, the value of the silicon wafers to be supplied is approximately $366 million to $670 million. The contract provides for increased volumes over the course of the term at fixed prices for each year with an annual price review for each calendar year. “It is exciting to be able to secure yet another meaningful contract for silicon which will enable us to achieve our ambitious growth targets during a time of industry-wide silicon supply shortages,” said Dr. Zhengrong Shi, Suntech’s chairman and CEO. “As all of these long-term silicon supply contracts are priced measurably below spot market prices, we will see immediate cost savings when they take effect in 2007.” According to Suntech, this agreement with Sunlight, combined with recent deals with suppliers such as Comtec, MEMC and REC, will enable Suntech to exceed its previous expectation that 70% of its wafer supply needs for its projected 2007 PV cell production output will be from fixed-price, multi-year contracts.
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