Hoku announces Solar-Fabrik deal, focus on silicon

Another week, another big silicon supply announcement from Hawaii's Hoku Scientific (NASDAQ: HOKU)—this one sending its stock up more than 18 percent this morning, to trade at $8.18.

At the same time, the company announced it's exiting some sectors of its solar business.

The company's Hoku Materials subsidiary has signed an agreement to deliver polysilicon to a division of German solar company Solar-Fabrik AG over seven years.

The deal is to begin in the second half of calendar year 2009 and is worth up to $185 million.

The contract provides for an initial direct deposit of $2 million to Hoku upon signing, and provides for additional prepayments of $51 million before first shipping.

Hoku has now accepted more than $211 million in advance payments from customers, which it is using to build and expand its plants.

To meet its new obligations, Hoku says it will expand its existing plant capacity.

Last week's announcement of another silicon supply deal sent Hoku shares up 54 percent (see Hoku signs $678M silicon deal with Suntech.)

The company now has more than $1.2 billion in silicon supply contracts, after only announcing plans to get into the silicon business late last year.

With its successes in silicon, Hoku has announced plans to exit the solar module manufacturing business. It will resell a 15 megawatt per year solar module production line that it agreed to purchase from Spire Corporation, is stopping construction of a 30 megawatt solar module plant in Pocatello, Idaho and will resell $2.8 million of solar cells that it purchased from E-Ton Solar last October.

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