ST. PETERS, Mo. and BEIJING, July 6 /PRNewswire-FirstCall/ -- MEMC Electronic
Materials, Inc. (NYSE: WFR - News) and Suntech Power Holdings, Ltd. (NYSE: STP
- News), one of the world's top producers of solar cells and modules, announced
that they have signed a non-binding Letter of Intent ("LOI") for the
supply of solar grade silicon wafers.
Under the terms outlined in the LOI, MEMC will supply solar wafers to Suntech
over a 10-year period, with pre-determined pricing, on a take or pay basis beginning
in the first quarter of 2007. Sales of the wafers over the 10-year period would
generate between $5 billion and $6 billion in revenue for MEMC. As part of the
arrangement and in order for MEMC to meet Suntech's supply requirements, Suntech
will advance funds to MEMC in the form of an interest-free loan or security deposit
which will be used by MEMC for expansion of MEMC's manufacturing capacity. In
addition, MEMC will receive a warrant to purchase up to a 4.99% equity stake in
Suntech.
"Suntech is a fast growing player in the solar market, and we are pleased
with the prospect of helping them achieve a leading role in the marketplace,"
commented Nabeel Gareeb, MEMC's Chief Executive Officer. "The solar market
is growing at an impressive pace at over 30% per year, and MEMC is well positioned
to capitalize on the opportunities available in this marketplace. We have been
a leader in wafer manufacturing for over 40 years, and are excited about the
opportunity to complete our expansion into this fast-growing adjacent space,
while staying focused on our core competency of making wafers."
"We're pleased to pursue this long term wafer supply relationship with
MEMC," said Dr. Zhengrong Shi, Chairman and Chief Executive Officer of
Suntech. "Locking in a steady supply of solar wafers is key to our ability
to increase production output while maintaining our focus on innovation. We
look forward to a long relationship with MEMC that will benefit our customers
as the demand for alternative energy, and solar power in particular, continues
to grow."
The LOI reflects the parties' intent to conclude a definitive agreement in
August 2006. MEMC and Suntech cannot assure that the definitive agreement will
be concluded within this time frame, or at all. Execution of the definitive
agreement is contingent on agreement on all material terms and other customary
closing conditions for transactions of this nature.
About MEMC
MEMC is a global leader in the manufacture and sale of wafers and related intermediate
products to the semiconductor and solar industries. MEMC has been a pioneer
in the design and development of wafer technologies over the past four decades.
With R&D and manufacturing facilities in the U.S., Europe and Asia, MEMC
enables the next generation of high performance semiconductor devices and solar
cells.
About Suntech Power
Suntech Power Holdings Co., Ltd. is a leading solar energy company in the world
as measured by production output of solar cells in 2005. Suntech provides solar
solutions for a green future. Suntech designs, develops, manufactures and markets
a variety of high quality, cost effective and environmentally friendly PV cells
and modules for electric power applications in the residential, commercial,
industrial and public utility sectors. Suntech's customers are located in various
markets worldwide, including Germany, Spain, China and the United States. For
more information, please visit http://www.suntech-power.com.
Safe Harbor Statement
Certain matters discussed in this news release are forward-looking statements,
including MEMC's and Suntech's beliefs and expectations that the definitive
agreement would generate between $5 billion and $6 billion in revenue for MEMC
over the 10-year period of the agreement and that sales would begin in the first
quarter of 2007. Such statements involve certain risks and uncertainties that
could cause actual results to differ materially from those in the forward-looking
statements, including MEMC and Suntech being able to conclude a mutually satisfactory
definitive agreement consistent with the terms of the LOI on time or at all,
satisfaction of the LOI conditions to execution of a definitive agreement, the
success of MEMC and Suntech in performing under any definitive agreement and
the ability of MEMC to ramp up production of solar wafers to satisfy the terms
of a definitive agreement. These forward-looking statements represent MEMC's
and Suntech's judgment as of the date of this release. MEMC and Suntech disclaim,
however, any intent or obligation to update these forward-looking statements,
except as required under applicable law.
