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MEMC signs solar deal with Gintech Energy

Posted: 31 Oct 2006     Print Version  Bookmark and Share

Keywords:MEMC Electronic Materials  Gintech Energy  solar cells  Mark LaPedus 

MEMC Electronic Materials Inc. has signed a deal worth up to Rs.13,863 crore ($3 billion) with start-up Gintech Energy Corp. of Taiwan, its second major customer in the solar arena.

Under the terms, MEMC will supply solar wafers to solar-cell maker Gintech over a 10-year period, with pre-determined pricing, on a take or pay basis beginning in the second half of 2007.

Sales of the wafers over the 10-year period are expected to generate between Rs.11,552.50 crore ($2.5 billion) to Rs.13,863 crore ($3 billion) in revenue for MEMC. As part of the definitive agreement, Gintech will advance funds to MEMC, in the form of an interest-free loan or security deposit, which will be used for expansion of its manufacturing capacity. The company will also be eligible to purchase a 10 per cent interest in Gintech, as well as acquire the rights to an approximate 1.7 hectare parcel of land located within the Hsinchu Science Park.

"With this announcement, MEMC now has agreements to supply solar wafers worth between Rs.32,437 crore ($7 billion) to Rs.41,589 crore ($9 billion) dollars in revenue over the next decade," said Nabeel Gareeb, MEMC's chief executive, in a statement.

In July, MEMC said that it has discontinued its short-lived solar wafer agreement with Motech Industries Inc. of Taiwan and will instead work with rival Suntech Power Holdings Ltd of China. Motech is the largest solar-cell maker in Taiwan, while Suntech is the biggest in China.

The company supply solar wafers to Suntech over a 10-year period. Sales of the wafers over the 10-year period are expected to generate between Rs.23,105 crore ($5 billion) and Rs.27,726 crore ($6 billion) in revenue for MEMC. In addition, MEMC has received a warrant to purchase an approximately 4.9 per cent equity stake in Suntech.

MEMC inked the deal with Suntech for good reason. Fuelled by a new national renewable energy policy, China is moving towards a huge solar production ramp on all fronts of the domestic supply chain—polysilicon feedstock, wafers, cells and modules.

- Mark LaPedus
EE Times

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