Wednesday, May 28, 2008

Suntech Powers Up Its Solar Wafer Supply

Suntech is improving its wafer supply in hopes of becoming a leading manufacturer of solar modules.

On Tuesday, Suntech Power Holdings bought a $98.0 million stake in Shunda Holdings, a China-based solar wafer manufacturer. Details of the minority acquisition weren't disclosed except that the stake was purchased from Actis, a private equity investor in solar markets, and Waichun Investment Fund.

Suntech also signed a 13-year silicon wafer supply agreement with a Shunda subsidiary on Tuesday for an annual supply of silicon wafers with total volume of seven gigawatts through 2020.

"We believe that these transactions accelerate Suntech's path to grid parity and significantly enhance Suntech's long-term cost competitiveness through better pricing and volume allocations," said Suntech chairman, Dr. Zhengrong Shi, adding that the investment was made possible by funds raised through a convertible notes offering.

Suntech was drawn to Shunda because of the proximity and capacity of the company's new polysilicon plant, currently under construction in Yangzhou, Jiangsu province, where it will begin producing solar-grade polysilicon.
Suntech said that although the silicon wafers supplied by Shunda this year won't be initially significant to overall supply , they replace expensive spot market silicon.

"With this long-term agreement, we are able to increase our silicon secured for 2009 by 50 megawatts to 800 megawatts of silicon with an average cost more than 20.0% below our average cost of silicon in 2007," Suntech said. Silicon is often measured by how many watts of power it can provide. One megawatt, which is equal to one million watts, can power about 1000 homes at any given time.

No comments: