SOURCE: Hoku Scientific, Inc.

March 29, 2007 08:00 ET

Hoku Scientific Secures $13 Million Bank of Hawaii Credit Facility

KAPOLEI, HI -- (MARKET WIRE) -- March 29, 2007 -- Hoku Materials, Inc., a subsidiary of Hoku Scientific, Inc. (NASDAQ: HOKU) established to manufacture and sell polysilicon for the solar market, today announced that Bank of Hawaii is providing Hoku Materials with a credit facility of up to $13 million. Hoku Materials plans to use these funds to finance, in part, certain expenses related to its polysilicon production facility in Idaho, including the initial deposit of 3.1 million Euros (approximately $4.2 million) under its polysilicon reactor purchase contract with GEC Graeber Engineering Consultants GmbH, and MSA Apparatus Construction for Chemical Equipment Ltd. Payment of this initial deposit will begin the 15-month delivery deadline for equipment capable of producing 1,500 metric tons of polysilicon per year, with additional equipment being delivered within three months after the first delivery. This additional equipment will allow Hoku Materials to manufacture an additional 500 metric tons of polysilicon per year, for a planned annual production capacity of 2,000 metric tons. The credit facility will be secured by Hoku Materials' cash, cash equivalents and short-term investment fund balances.

"This credit facility from Bank of Hawaii enables us to order our polysilicon reactors in time to meet our planned polysilicon production and customer delivery schedule in early 2009," said Dustin Shindo, Chairman and CEO of Hoku Scientific. "In addition to this $13 million credit facility, we plan to finance the estimated $260 million to construct our polysilicon production facility with customer prepayments and debt. SANYO has already deposited approximately $110 million into an escrow account as a prepayment against our $370 million seven-year polysilicon supply agreement with them. These funds will be released to us in advance as we achieve certain milestones related to the construction of our plant and the production of polysilicon."

About Hoku Scientific, Inc.

Hoku Scientific (NASDAQ: HOKU) is a clean energy technologies company that develops and manufactures 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 solar modules and polysilicon for the solar market. For more information visit www.hokuscientific.com.

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 raise sufficient funds to establish polysilicon manufacturing facilities; its ability to engineer and construct a production plant for polysilicon; its relationships with Bank of Hawaii and other contracting parties; its ability to manufacture polysilicon; its ability to meet the delivery schedule in its customer contracts; its ability to successfully achieve the milestones in its contract with SANYO Electric, Co., Ltd.; GEC and MSA's ability to meet the delivery schedules in their agreement with the Company; the Company's 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's future financial performance; Hoku Scientific's business strategy and plans; and objectives of 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's filings with the Securities and Exchange Commission. Except as required by law, Hoku Scientific assumes 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.

Hoku, Hoku Solar, Hoku Materials and the Hoku Scientific logo are trademarks of Hoku Scientific, Inc., all rights reserved.

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