Hoku Scientific Announces $25 Million Private Placement

Monday, Feb. 25 2008

KAPOLEI, HI, Feb 25, 2008 (MARKET WIRE via COMTEX) -- Hoku Scientific, Inc. (NASDAQ: HOKU), a materials science company focused on clean energy technologies, today announced it has entered into a securities purchase agreement with certain institutional investors, and a wholly owned subsidiary of Suntech Power Holdings Co., Ltd. (NYSE: STP), one of the world's leading manufacturers of photovoltaic cells and modules, to raise approximately $25 million through the issuance of 2,893,520 shares of common stock. Suntech's subsidiary has agreed to contribute approximately $20 million of the financing. The financing is expected to close on or before February 29, 2008, subject to the satisfaction of customary closing conditions.

The Company intends to use the net proceeds from this financing for the construction of its planned polysilicon production plant in Pocatello, Idaho, and for general corporate purposes, including working capital.

"This equity financing is a significant step forward to obtain our larger debt financing for the construction and procurement of our planned polysilicon plant in Pocatello, Idaho, as we believe that the proceeds from this offering, plus our other cash commitments to the construction and procurement of the polysilicon plant, will satisfy the Merrill Lynch requirement that we contribute up to $35 million in equity towards the project prior to completing our debt financing," said Dustin Shindo, chairman and CEO of Hoku Scientific. "We are especially pleased that one of our key polysilicon customers, Suntech, has made this investment in our company, as it is a sign of their confidence in our business."

In June 2007, Suntech entered into a supply agreement with Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, to purchase up to $678 million of polysilicon from Hoku Materials over a ten year period, with the first shipment scheduled for delivery in 2009. Under the supply agreement, Suntech is obligated to pay Hoku Materials up to $47 million in prepayments for products, subject to Hoku's successful completion of various milestones. Suntech has paid Hoku $2 million of the prepayment, and the $45 million balance is secured by a letter of credit issued to Hoku by ABN Amro NV. Hoku Materials also announced today that it has amended its supply agreement with Suntech to extend the date for Hoku Materials to complete the financing for its planned polysilicon plant to May 31, 2008. This is the only modification to the agreement and aligns the financing deadline in the Suntech agreement with the financing deadline in Hoku's polysilicon supply contract with Sanyo Electric Co, Ltd. Under the terms of the original agreement and the amendment, Hoku Materials or Suntech may terminate the supply agreement if Hoku Materials has not secured financing for its polysilicon plant by the financing deadline.

"We are pleased to strengthen our partnership with Hoku through this investment," said Dr. Zhengrong Shi, chairman and CEO of Suntech. "Through the long term supply of silicon at prices well below today's spot-market rates, Hoku will play a key role in our plan to produce grid parity solar products. Hoku's polysilicon supply will also enable Suntech to continuously expand its production capacity and deliver the means to generate clean, renewable energy to a growing proportion of the world's population."

Deutsche Bank Securities Inc. acted as the sole placement agent for the transaction.

The securities offered and sold in the private placement were not registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws, and may not be offered or sold in the United States absent registration, or an applicable exemption from registration, under the Act and applicable state securities laws.

Under an agreement with the investors, Hoku Scientific is required to file a registration statement with the Securities and Exchange Commission covering the resale of the shares of common stock issued to the investors no later than ten days after the closing and to use best efforts to have the registration statement declared effective as soon as practicable thereafter