Rumours of a tie-up with Samsung have proved true, with the news that MEMC will establish a new joint-venture firm with Samsung Fine Chemicals to produce polysilicon for the PV industry. The agreement between SFC and MEMC's affiliate, MEMC Singapore, includes building a 10,000MT plant in Ulsan, Korea, close to an SFC chemical plant. Production ramp is targeted for 2013.
“This joint venture signals SFC's entry into the fast moving renewable energy market and establishes a new engine for long-term growth,” commented Hyun-min Hong, executive director of SFC's Strategic Planning Division.
MEMC had recently said that it planned to expand its operations to meet demand for wafers.
Ken Hannah, president of MEMC Solar Materials, said, “This partnership supports MEMC's internal growth commitments, and gives us yet another tool to support our customers in the region with some of the best products and services in the industry.”
In a research note discussing the move by MEMC to partner with SFC on polysilicon production, Jeffries financial analyst Jesse Pichel estimated the total investment for the new plant would be approximately US$1 billion. MEMC’s equity contribution was estimated to be 25%, while 25% would be allocated to Samsung, and 50% would be bank debt to the JV, which would be placed on the JV balance sheet.
MEMC’s direct contribution would only be in the range of US$250 million. SFC’s interest in partnering on the project was said to make sense, as MEMC’s experience and proprietary low-cost technology would limit risks when ramping.