China's LDK Solar (NYSE: LDK [1]) said today it signed a contract to supply multicrystalline solar wafers to Taiwan-based Chuan-Yi Investment.

LDK said the agreement is for $516 million worth of wafers over three years.

"This agreement advances our strategy of broadening our customer base and demonstrates our position as a leading manufacturer of solar wafers," said Xiaofeng Peng, chairman and CEO of LDK.

Multicrystalline solar wafers are the principal raw material used to produce solar cells.

"This contract enhances Chuan-Yi's ability to promote the combined applications of solar power and LED," said Chuan-Yi chairman Jin-Jiang Yeh.

Chuan-Yi, an investment firm focused on the optoelectronic industry, is an affiliate of Everlight Electronics, an LED company.

LDK, headquartered in Xinyu City in Jiangxi province, announced in July that it planned to start making its own polysilicon (see Solar verticalization continues [2]).

The company said it would purchase polysilicon reactors and other equipment from U.S.-based GT Solar and install it at its plants in Xinyu.

LDK said it will be able to create up to 6,000 metric tons of silicon in 2008 and 15,000 metric tons in 2009.

LDK, whose major customers include Suntech Power, Canadian Solar, Chinalight Solar, Solarfun Power, and Solland Solar, also has an office in Sunnyvale, Calif.