SOURCE: Hoku Scientific, Inc.

June 13, 2007 16:05 ET

Hoku and Suntech Sign $678 Million Polysilicon Supply Contract

POCATELLO, ID and WUXI, CHINA--(Marketwire - June 13, 2007) - Hoku Materials, a wholly-owned subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU) established to manufacture polysilicon for the solar market, and Suntech Power Holdings Co., Ltd. (NYSE: STP), one of the world's leading manufacturers of photovoltaic (PV) cells and modules, today announced the signing of a definitive contract for Hoku's sale and delivery of polysilicon to Suntech over a ten-year period beginning in mid-2009.

Under the contract, up to approximately $678 million may be payable to Hoku during the ten-year period, subject to the achievement of milestones, the acceptance of product deliveries and other conditions. The contract provides for the delivery of predetermined volumes of polysilicon each year at set prices, using a take-or-pay approach, beginning with the first shipment in 2009 and continuing over a ten-year period from the first shipment. The contract also provides for an initial deposit of $2 million to Hoku upon signing and requires that Suntech make additional prepayments for products in the amount of $45 million. Under the agreement, this prepayment is to be paid to Hoku in installments, subject to Hoku's successful achievement of certain polysilicon quality and production volume milestones and other conditions. The prepayment amount is backed by a letter of credit issued to Hoku by the Bank of Communications. The contract includes a provision that allows for either party to cancel years 8 through 10 of delivery for any reason. Such cancellation notice must be delivered to the other party prior to the end of the fourth year of delivery under the agreement.

"We are pleased to have established this relationship with Suntech, a long term leader in the solar industry," said Dustin Shindo, Chief Executive Officer of Hoku Scientific. "Their rapid growth and dynamic leadership team make them an ideal partner for our company."

"Securing a long-term supply of polysilicon from Hoku will enable us to continue to expand our manufacturing capacity and execute on Suntech's strategic plan," said Dr. Zhengrong Shi, Suntech's Chairman and CEO. "We look forward to a strong and enduring business relationship with Hoku."

Hoku is in the process of building a plant capable of producing 2,000 metric tons of polysilicon per year in Pocatello, Idaho. Hoku announced in January the signing of a seven-year polysilicon supply contract with SANYO Electric Co., Ltd. that would provide for approximately $370 million in payments to Hoku over the term of the agreement. Hoku estimates that the establishment of this plant may require total construction costs of approximately $260 million. In connection with the financing of this construction, Hoku intends to seek debt capital of approximately $150 million. While Hoku believes that it is on track with the establishment of the polysilicon plant, under the agreement announced today, if Hoku is ultimately not successful in building the polysilicon plant, or if Hoku does not meet certain quality and productivity milestones or timely deliver minimum quantities of polysilicon, the agreement provides that the initial direct deposit will be returned to Suntech, and the letter of credit may be cancelled.

About Hoku Scientific, Inc.

Hoku Scientific (NASDAQ: HOKU) is a clean energy technologies company that historically developed and manufactured fuel cell membranes and membrane electrode assemblies for stationary (including residential and back-up power applications) and automotive proton exchange membrane fuel cells. The Company is currently expanding its business to manufacture polysilicon and install solar modules for the solar market. For more information about Hoku, please visit

Hoku® and Hoku Scientific® are registered trademarks and Hoku Materials™ is a trademark of Hoku Scientific, Inc.

About Suntech Power Holdings Co., Ltd.

Suntech Power Holdings Co., Ltd. is a leading solar energy company in the world as measured by both production output and capacity of solar cells and modules. Suntech provides solar solutions for a green future. Suntech designs, develops, manufactures, and markets a variety of high quality, cost effective and environmentally friendly PV cells and modules for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech's majority-owned subsidiary, MSK Corporation is one of the top-ranked companies in the building-integrated photovoltaics (BIPV) space. Suntech's customers are located in various markets worldwide, including key markets throughout Europe, North America, Japan and China. For more information, please visit

Forward-Looking Statements

This press release contains forward-looking statements that involve many risks and uncertainties. These statements relate to Hoku Scientific's ability to successfully derive revenues from the sale of polysilicon to Suntech and Sanyo; its ability to successfully raise sufficient funds to establish a polysilicon manufacturing plant; its ability to engineer and construct a production plant for polysilicon; Hoku Scientific's relationships with Suntech and Sanyo and other contracting parties; its ability to manufacture polysilicon; its ability to meet the delivery schedule in its agreement with Suntech; its ability to license any necessary intellectual property rights to enter the polysilicon business; the quality of polysilicon to be manufactured; Hoku Scientific's costs to manufacture polysilicon, and its ability to offer pricing that is competitive with competing products; Hoku Scientific and Suntech's respective future financial performance; Hoku Scientific and Suntech's respective 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 or Suntech'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 Suntech's filings with the Securities and Exchange Commission, as applicable. Except as required by law, Hoku Scientific and Suntech assume no 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 Suntech Power Holdings Co., Ltd.:

    In the United States:
    Sanjay M. Hurry
    Vice President
    The Piacente Group, Inc.
    Tel: +1-212-481-2050
    Email: Email Contact

    In China:
    Rory Macpherson
    Ogilvy Public Relations Worldwide
    Tel: +86-10-8520-6553
    Email: Email Contact