Suntech buys minority stake in Asia Silicon

Suntech Power Holdings has recently acquired a minority stake in Asia Silicon from an existing shareholder for approximately $8.1 million, the companies announced.

"We are very pleased to cement our relationship with Asia Silicon," said Zhengrong Shi, Suntech's chairman/CEO (pictured at left). "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 already has an agreement to buy high-purity polysilicon from Asia Silicon, for a total value of up to $1.5 billion over a seven-year period. During the term of the contract the price of the poly is set to decrease to below $40 per kilogram.

"We are very excited to have successfully initiated high-purity polysilicon production and now welcome the strengthening of our partnership with Suntech," stated Tihu Wang, Asia Silicon's CEO. "The rapid construction and startup of our closed-loop facility is testament to the dedication and expertise of our team of scientists, engineers, and operations professionals. Building on our industry leading cost structure and world-class technology, we will continue to grow our polysilicon business with the continuing support of the local government, the Chinese financial community, and Suntech, and we are well-positioned to become a leading player in the polysilicon industry."

Asia Silicon is ramping a state-of-the-art polysilicon plant in Qinghai, China. The company began production of high-purity polysilicon at the end of 2008 and has set a target of 2000 metric tons of annual production capacity by mid-2009. Tests on the initial products show excellent quality that can meet both solar- and electronic-grade requirements, the company said.

The announcement comes on the eve of Suntech's release of its fourth-quarter and full-year 2008 financial results, which takes place tomorrow (Feb. 18).