MEMC and Suntech finalize solar wafer supply contract
Under the terms of the definitive agreement, 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 definitive agreement 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 has received a warrant to purchase an approximately 4.9% equity stake in Suntech.
Commenting on the signing of the wafer supply agreement, Nabeel Gareeb, MEMC's Chief Executive Officer, said, "We are pleased to announce the closure of this agreement between two industry leaders. The close cooperation between the two companies has allowed us to finalize the contract quickly. We look forward to working with Suntech over the next decade as we continue our expansion into the fast-growing solar wafer market."
