Canadian Solar Building Silicon Wafer Plant

Monday, February 25, 2008; Posted: 04:45 AM

SUZHOU, Feb 25, 2008 (SinoCast via COMTEX) -- Canadian Solar Inc. (Nasdaq: CSIQ), a Chinese photovoltaic (PV) company registered in Canada, is creating a large-scale silicon wafer plant in the northern Chinese city of Luoyang, extending its industry chain, said Shawn Qu, the company's chairman.

In the past, the company always specialized in manufacturing solar modules. With a view to having the initiative in raw materials supply and further consolidating its position in industry, Canadian Solar decided to actively march into the upstream PV realm.

Last year, it began to build a 3,000-ton silicon wafer project with a total investment of CNY 1.2 billion, which was predicted to achieve annual sales revenues of CNY 6 billion once completed. The equipment for the Phase I will be installed in April 2008, and Canadian Solar is likely to put the Phase I into production this summer.

Canadian Solar Chairman Shawn Qu added that the company would support the project above, by virtue of the purchase of silicon material from overseas markets as before. Meanwhile, it has recently inked long-term silicon material supply contracts with many domestic polysilicon producers, such as Luoyang Zhonggui High-tech Co., Ltd.

Established in 2001, Canadian Solar settled its China headquarter in Suzhou, a coastal city in east China. So far, it has grown into a global provider of solar power products.

Currently, more Chinese investors are swarming into PV industry, and the polycrystalline silicon market has to witness extremely overheated investments. For instance, the market has allured Baoding Tianwei Baobian Electric Co.,Ltd.(SHSE: 600550), Sichuan Chuantou Energy Co., ltd. (SHSE: 600674), Leshan Electric Power Co.,Ltd.(SHSE: 600644), and Sichuan Minjiang Hydropower Co., Ltd. (SHSE: 600131).

However, Shi Zhengrong, chairman of Wuxi Suntech Power Co., Ltd. (NYSE: STP), one of China's solar energy giants, declared on December 12, 2007 that polysilicon investment misfitted the nation.

"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."

Till now, the total production capacity of China's companies, who are ready for polysilicon projects, has reached 30,000 tons, so that it is hard to say whether the heating investments in PV markets is good news or not, the domestic PV expert Mr. Wang Sicheng said anxiously.