October 25, 2007: 08:00 AM EST
SAN FRANCISCO, Calif., Oct. 25 /Xinhua-PRNewswire/ -- Suntech Power Holdings Co., Ltd. one of the world's leading manufacturers of photovoltaic (PV) cells and modules, today announced that it has entered into a definitive contract with Asia Silicon Co., Ltd. to purchase high purity polysilicon from Asia Silicon with a total value of up to $1.5 billion over a seven-year period.
The polysilicon supplied by this agreement during the seven-year period is subject to the acceptance of product deliveries and other conditions. The contract provides for the delivery of a volume range of polysilicon each year at fixed prices, using a take-or-pay approach, with delivery beginning in the second half of 2008. A predetermined annual price reduction curve will provide Suntech with high purity polysilicon at prices lower than any of Suntech's other contracts.
''This contract with Asia Silicon will form a critical element of Suntech's polysilicon supply portfolio as the average price paid under the contract is so low that we believe that it reflects what is essentially grid parity pricing for Suntech, when combined with our high efficiency solar cells and world class low cost of production,'' said Dr. Zhengrong Shi, Suntech's Chairman and CEO. ''We believe that this is truly transformational, with the price decreasing to substantially below $40 per kilogram, as it enables Suntech to be at the forefront of leading the solar industry towards an environment without government subsidies or incentives.''
Asia Silicon is deep in the process of building a state-of-the-art polysilicon plant in Qinghai, China with polysilicon production capacity targets of 2,000 metric tons by July of 2008 and over 6,000 metric tons by the end of 2010. The polysilicon plant will utilize the low-risk, well-proven trichlorosilane-based advanced Siemens production process and has already achieved impressive milestones in its development. Plant design started early last year and orders for equipment and engineering services from industry leading vendors including GT Solar Incorporated, Centrotherm GmbH/SiQ GmbH/Solmic GmbH, and Chemical Design, Inc. have been in the pipeline for almost a year. Up to 80% of electricity used in Asia Silicon's production of polysilicon will be supplied from renewable energy hydropower sources with a pricing structure that is among the lowest industrial electricity rates in China.
''The new polysilicon plant will employ best of class production equipment and processes, and is headed by Dr. Tihu Wang, one of the world's leading polysilicon material scientists. Dr. Wang has built a formidable team of talented scientists, engineers and operations professionals to execute on Asia Silicon's aggressive growth plan and we are very confident in their ability to produce high purity polysilicon,'' said Dr. Shi.
Dr. Tihu Wang, Asia Silicon's CEO said: ''We are delighted to enter this partnership with Suntech, one of the world's premier solar cell and module producers. This agreement is a milestone achievement for Asia Silicon and will support our development over the long term. With Suntech's impressive growth as an example, we look forward to rapidly developing and expanding our production capacity of high quality polysilicon.''
Commenting on the progress of the plant development, Dr. Wang said: ''I am very pleased with the progress we have made so far. Plant construction has been underway during 2007 achieving impressive milestones and we are on- schedule to complete the construction work and to start polysilicon production in the second half of 2008. We believe that we will have among the lowest production costs in the industry with our 20 year low cost electricity agreement as well as a capex plan that is half the cost of some other polysilicon producers.''
Asia Silicon has assembled an expert technical team that has over 150 years of combined experience in the research, development and production of polysilicon and the precursor gas ultra-pure trichlorosilane. Dr. Wang is a veteran silicon scientist of over 25 years and spent 18 years at the National Renewable Energy Laboratory of the U.S. Department of Energy in Colorado where he was the leading silicon material scientist and a project leader. He received his Ph.D in applied physics from the Colorado School of Mines in the United States.
About Suntech
Suntech Power Holdings Co., Ltd. is a leading solar energy company in the world as measured by both production output and capacity of solar cells and modules. Suntech provides solar solutions for a green future. Suntech designs, develops, manufactures, and markets a variety of high quality, cost effective and environmentally friendly PV cells and modules for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech's majority-owned subsidiary, MSK Corporation is one of the top-ranked companies in the building-integrated photovoltaics (BIPV) space. Suntech's customers are located in various markets worldwide, including key markets throughout Europe, North America, Japan and China. For more information, please visit http://www.suntech-power.com .
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