Report: MEMC selling out Taiwan silicon subcons

November 20, 2006 – Flush with new business from solar-cell customers in Asia, MEMC Electronic Materials Inc. has anxiously approached two Taiwanese manufacturers to help grow and slice the silicon ingots, according to the Taiwan Economic News.

MEMC has been actively pursuing the solar market for supply of its wafers, a segment seen growing at a >30% annual clip, according to recent comments by MEMC CEO Nabeel Gareeb. The firm has signed two new silicon wafer supply deals signed in recent months (China’s Suntech Power Holdings Ltd., and Taiwan’s Gintech Energy Corp.), which could add an estimated $7-$9 billion in revenues over the next 10 years, starting in 1H07.

The rumored contract business for Sino-American Silicon Products Inc. (which already has ties with Suntech) and Green Energy Technology Inc. could be worth billions of dollars, according to the paper, noting that both firms have been expanding production capacity in anticipation of surging orders. Green Energy plans to more than double annual output to 120MW cells by next spring, while Sino-American is increasing output to 500,000 MW/year by the end of 2006, and monthly shipments of silicon wafers to 1.3 million units.

The paper noted that selling out the two firms’ capacities would likely lead to soaring prices for silicon ingot growing/slicing services.

Both silicon contract firms have enjoyed financial success this year as business is booming. Sino-American has more than doubled its revenues over the past 10 months from the same period a year ago to ~$103 million, while Green Energy has increased sales nearly eightfold to about $53 million during the same period.


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