SOURCE: Hoku Scientific, Inc.; Solarfun Power Holdings, Co. Ltd.

May 13, 2008 06:45 ET

Hoku and Solarfun Approve Amendment and Extension of Polysilicon Supply Agreement

POCATELLO, ID and QIDONG, CHINA--(Marketwire - May 13, 2008) - Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU), established to manufacture and sell polysilicon for the solar market, and Solarfun Power Hong Kong Limited, a subsidiary of Solarfun Power Holdings Co., Ltd. (NASDAQ: SOLF), an established manufacturer of both photovoltaic (PV) cells and modules in China, today announced that they have amended their polysilicon supply contract to increase the term of the contract from eight to ten years. Total amounts that may be payable to Hoku Materials under the contract have increased from up to approximately $306 million for the eight year contract, to up to approximately $384 million for the amended ten year contract. Hoku Materials and Solarfun also agreed to a mutual right to terminate the supply agreement if Hoku Materials is unable to raise an aggregate of $75 million in financing for its polysilicon production plant by December 31, 2008 (including the $25 million that was already raised by Hoku Scientific's sale of common stock in February 2008). Solarfun may also terminate the agreement if Hoku Materials is unable to complete polysilicon shipment milestones and quality specifications by December 31, 2009.

"We're strengthening our relationship with Solarfun by extending the term from eight to ten years," said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. "A ten-year term allows us to better plan for our long-term operations, including the timing of future product sales and plant expansions. Adding the financing milestone gives each company the flexibility to terminate the contract if Hoku is ultimately unable to finance the completion of the plant. This makes sense for both companies, as it would be impossible to honor a long-term purchase and supply commitment if the plant is ultimately not built."

"We are pleased with the amendment of our contract with Hoku," said Solarfun's chief executive officer, Harold Hoskens. "We look forward to their timely delivery of polysilicon as scheduled by the 2nd half of 2009."

About Hoku Scientific, Inc.

Hoku Scientific, Inc. (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar is a provider of turnkey photovoltaic systems in Hawaii. Hoku Fuel Cells has developed proprietary fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchange membrane fuel cells. For more information visit www.hokuscientific.com.

Hoku® and Hoku Scientific® are registered trademarks and Hoku Solar™ and Hoku Fuel Cells™ are trademarks of Hoku Scientific, Inc. Hoku Materials™ is a trademark of Hoku Materials, Inc. All rights reserved.

About Solarfun Power Holdings Co., Ltd.

Solarfun Power Holdings Co, Ltd. (NASDAQ: SOLF) manufactures both PV cells and PV modules, provides PV cell processing services to convert silicon wafers into PV cells, and supplies solar system integration services in China. Solarfun produces both monocrystalline and multicrystalline silicon cells and modules, and manufactures 100% of its modules with in-house produced PV cells. Solarfun sells its products both through third-party distributors, OEM manufacturers and directly to system integrators. Solarfun was founded in 2004 and its products have been certified to TUV and UL safety and quality standards. For more information visit www.solarfun.com.cn.

Forward-Looking Statements

This press release contains forward-looking statements that involve many risks and uncertainties. These statements relate to Hoku Materials's ability to successfully derive revenues from the sale of polysilicon to Solarfun; its ability to successfully raise sufficient funds to establish a polysilicon manufacturing plant by December 31, 2008, or at all; its ability to engineer and construct a production plant for polysilicon; Hoku Scientific's relationship with Solarfun; its ability to manufacture polysilicon; its ability to meet the polysilicon shipment milestones and quality specifications in its agreement with Solarfun by December 31, 2009, if at all; the quality of polysilicon to be manufactured; Hoku Materials's costs to manufacture polysilicon, and its ability to offer pricing that is competitive with competing products; Hoku Scientific and Solarfun's respective future financial performance; their business strategies and plans; and objectives of each company's management for future operations. In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause Hoku Scientific's actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. In evaluating these statements, you should specifically consider the risks described in Hoku Scientific and Solarfun's respective filings with the Securities and Exchange Commission, as applicable. Except as required by law, neither Hoku Scientific nor Solarfun assume any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Contact Information

  • CONTACTS for Hoku Scientific:

    In Hawaii:
    Hoku Scientific
    Tel: 808-682-7800
    Email Contact

    CONTACTS for Solarfun Power Hong Kong Limited
    Solarfun Power Holdings Co., Ltd.
    Investor Relations
    8621-6306-8907
    Email Contact

    or

    Christensen Peter Homstad
    Email Contact
    480 614 3000

    or

    Shelldy Cheung
    852-2117 0861
    Email Contact