Suntech Pays $8M For Asia Silicon Stake

Feb 20 2009 | 10:34am ET

Suntech Power Holdings, a leading manufacturer of photovoltaic (PV) cells and modules, has acquired a minority stake in the Chinese polysilicon maker Asia Silicon from an existing shareholder for an estimated $8.1 million.

''We are very pleased to cement our relationship with Asia Silicon,'' said Dr. Zhengrong Shi, Suntech chairman and CEO in a statement. ''Asia Silicon has all the makings of a world class polysilicon producer due to the utilization of the most advanced production equipment, their expert technical team and industry-leading cost structure. By combining Asia Silicon's low-cost polysilicon with Suntech's high conversion efficiency technology, we believe that we will be able to achieve grid parity in many parts of the world within the next two or three years.''

Suntech previously entered into an agreement to purchase high-purity polysilicon from Asia Silicon worth up to $1.5 billion over a seven-year period. The price of the silicon decreases to under $40 per kilogram during the term of the contract.

Asia Silicon is in the ramp-up stage of a state-of-the-art polysilicon plant in Qinghai, China. Asia Silicon initiated production of high-purity polysilicon at the end of 2008 and expects to reach annual production capacity of  2,000 metric tons by mid-2009. The polysilicon plant utilizes the trichlorosilane-based advanced Siemens production process with a comprehensive recycling system and employs equipment and engineering services from industry leading vendors.

Up to 80% of the electricity used at the facility will be supplied from renewable energy hydropower sources.

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