MEMC lands $3 Billion Solar Deal
MEMC Electronic Materials Inc. has signed a deal worth up to $3 billion with startup Gintech Energy Corp. of Taiwan. Under the terms, MEMC will supply solar wafers to solar-cell maker Gintech over a 10-year period, with pre-determined pricing, on a take or pay basis beginning in the second half of 2007.
Sales of the wafers over the 10-year period would generate between $2.5-to-$3 billion in revenue for MEMC. As part of the definitive agreement, Gintech will advance funds to MEMC in the form of an interest-free loan or security deposit. The funds will be used by MEMC for expansion of its manufacturing capacity. In addition, MEMC will be eligible to purchase a 10% interest in Gintech, as well as acquire the rights to an approximate 1.7 hectare parcel of land located within the Hsinchu Science Park.
"With this announcement, MEMC now has agreements to supply solar wafers worth between $7-$9 billion dollars in revenue over the next decade," stated Nabeel Gareeb, MEMC's Chief Executive.
MEMC suppliers wafers to the semiconductor and solar sectors, but solar represents its fastest-growing business. The company also makes and sells polysilicon, the key material for raw wafers. Gintech was founded in 2005 and is supported by several top executives from the petroleum, petrochemical, semiconductor and electronics industries in Taiwan with insight into the global trends of renewable energy.