Suntech buying silicon from Sunlight, solving mystery

Finally naming the company first reported by the Cleantech Group in November, Suntech (NYSE: STP) today announced it will buy approximately half a billion dollars of silicon from U.S.-based Sunlight Group Inc.

Suntech will buy silicon wafers from Sunlight over a 5-year period.

Sunlight is headquartered in the U.S. with production based in China and Japan.

The contract provides for increased volumes over the course of the term at fixed prices for each year with an annual price review for each calendar year. Based on existing contract prices, the value of the silicon wafers to be supplied is approximately $366 million to $670 million.

"It is exciting to be able to secure yet another meaningful contract for silicon which will enable us to achieve our ambitious growth targets during a time of industry-wide silicon supply shortages. As all of these long term silicon supply contracts are priced measurably below spot market prices, we will see immediate cost savings when they take effect in 2007,'' said Dr. Zhengrong Shi, Suntech's chairman and CEO.

This agreement with Sunlight combined with recent deals with suppliers such as Comtec, MEMC and REC will enable Suntech to exceed its previous expectation that 70% of its wafer supply needs for its projected 2007 PV cell production output will be from fixed-price, multi-year contracts, the company said.

Suntech designs, develops, manufactures, and markets a variety of PV cells and modules for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech's majority-owned subsidiary MSK Corporation is one of Japan's largest PV manufacturers and one of the top-ranked companies in the building-integrated photovoltaics (BIPV) space.

Suntech's customers are located in various markets worldwide, including key markets throughout Europe, Japan, China and the United States.

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