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MEMC and Suntech Announce Solar Wafer Supply Letter of Intent
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.