Suntech Power Chairman: Poly-Si Investment Misfits China

Friday, December 14, 2007;

WUXI, Dec 14, 2007 (SinoCast via COMTEX) -- Shi Zhengrong, chairman of Wuxi Suntech Power Co., Ltd. (NYSE: STP), one of China's solar energy giants, announced on December 12, 2007 that polysilicon investment was not suitable for the nation.

Currently, more investors are swarming into the Chinese photovoltaic (PV) industry. Meanwhile, the domestic polycrystalline silicon market receives extremely overheated investment.

"As a matter of fact, it is not practical for China to produce polysilicon, mainly due to such a high electricity charge," said the chairman. "Therefore, I suggest that investors should seek more development opportunities in Canada, the US, Australia, and other countries with a lower electricity charge."

Recently, the silicon materials prices are on the surge, and a large amount of the nation's capital was injected into the polycrystalline silicon field.

Two weeks ago, Baoding Tianwei Baodian Electric Co., Ltd. (SHSE: 600550) announced that its holding subsidiary Sichuan Xinguang Silicon Co., Ltd. would create two 3,000-ton polysilicon projects in the southwestern Chinese cities of Chengdu and Leshan, respectively.

Two newly incorporated ventures there will be responsible for the projects above with a total investment of about CNY 2.675 billion, said people familiar with the matter.

Several days later, Jiangxi LDK Solar Hi-Tech Co., Ltd. (NYSE: LDK), a domestic polycrystalline silicon wafer magnate, declared the start-up of its new polysilicon factory located in the southern Chinese city of Xinyu, Jiangxi Province.

It is predicted to complete the project with an annual production capacity of 6,000 tons at the end of 2008, according to the company's timetable.

The new project is part of LDK Solar's 15,000-ton silicon material plan, which draws a total investment in fixed assets of more than CNY 12 billion, is forecasted to turn into one of the world's solar power projects with most investments and biggest designed production capacity.
LDK Solar is to develop into one of front-runners in the global polysilicon field, after putting all projects into production in 2009 and forming a 15,000-ton production capacity.

Meanwhile, the LDK Solar project will contribute a lot to the fast and steady growth of China's PV industry. It can not only effectively cover the shortage of raw materials supply, but also largely cut the competitive edge of the sector above.

"Presently, the total production capacity of China's companies, who are ready for polysilicon projects, reaches 30,000 tons," the domestic PV expert Mr. Wang Sicheng said anxiously. "It is hard to say whether the heating investments in PV markets is good news or not."