MEMC Electronic Materials and Conergy announced that they have executed a definitive agreement for MEMC to supply solar grade silicon wafers to Conergy. Under the terms of the definitive agreement, MEMC will supply solar wafers to Conergy over a 10-year period, with pre-determined pricing, on a take or pay basis beginning in the third quarter of 2008. Sales of the wafers over the 10-year period would generate between $7 billion and $8 billion in revenue for MEMC.
As part of the definitive agreement, Conergy will advance funds to MEMC in the form of a capacity reservation deposit. In addition, MEMC will participate in 5% of the increase in value of Conergy's solar module/cell subsidiary.
"MEMC is very pleased to enter this long-term wafer supply relationship with Conergy," commented Nabeel Gareeb, MEMC's Chief Executive Officer. "Conergy is the largest installer of photovoltaic systems in the world, and we are pleased with the prospect of helping them expand their leadership position in the marketplace. We feel confident that MEMC's nearly fifty years of wafer making experience will prove instrumental in allowing both companies to win in the solar space."
Commenting on the signing of the wafer supply agreement, Hans-Martin Ruter, Conergy's Chief Executive Officer, said "Conergy continues to grow its global brand by focusing on the needs of the customer. This agreement with an efficient industry leader like MEMC, will play an important role as we continue to increase our scale and enhance the total value proposition for our customers. Together, MEMC and Conergy can expand our positions in our respective markets while supporting and enabling the growing demand for solar energy worldwide."
