Friday, September 12, 2008

LDK News - New Contract - Q-Cells - UMG Processing.

LDK Solar Signs 11-Year Agreement for Processing of Solar-Grade Silicon for Q-Cells AG, Coupled With MOU for up to 5 GW in Additional Wafer Supplies

"LDK Solar Co., Ltd. (NYSE: LDK), a leading manufacturer of multicrystalline solar wafers, announced today that it has signed an 11-year processing service agreement to process upgraded metallurgical grade (UMG) solar-grade silicon provided by Germany-based Q-Cells AG into wafers.

Under the terms of the agreement, LDK Solar will process a minimum of 20,000 metric tons of UMG solar-grade silicon in the years 2008-2018, with an option to process an additional 21,000 metric tons during the same period. The processing service agreement is linked to a Memorandum of Understanding between the parties for LDK Solar to supply Q-Cells with up to five giga watts of multicrystalline solar wafers via a "take or pay" contract for the ten-year period between 2009-2018."

WOW! LDK Does it again, with a contract that assures that they'll have work available for every Wafer-Cutting Machine, and for pretty much as many employees as they can handle.

Their early adoption of UMG Technologies is a powerful advantage, particularly in today's Silicon Market, as the price of UMG is presently less than half the price of High Quality Polysilicon. It should also be noted that this supply agreement becomes effective THIS YEAR, 2008, and so will be reflected in Earnings for Q4, at least.

This is another example of LDK Maximizing their their use of all available Resources, for the purpose of growing business Now, and for the Future.

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Vroems said...

I wonder.
Even if the price for the base material is cut in half the processing technique is expensive compared to the coating process that is being developed by Nanosolar.
Is not the silicon based concept like pulling on a dead horse?
Pity few in the industry give an estimated price per watt, which is the most important issue I believe.

D Pickard said...


I'd say not. Silicon is king, and will remain so. When you're talking about the size of the energy market, even now, not to mention the size of the Energy Market in many years after (hopefully) an incredible amount of Economic Growth around the world, then you've got to wonder how any energy providers will be able to scale up to the task in the absense of incredible amounts of raw materials. Nanosolar (and others) have great technology, and CIGS has a much brighter future than CdTe, but there is simply no way that it will be able to expand in production compared to Silicon, which is the second-most common element by mass in the Earth's crust. While prices of Indium start increasing (not only due to solar, but also due to it's use in monitors, etc), Silicon prices will come down, not only by expanded production, but by new capacities for using less silicon per watt.

You can go to the most recent LDK investor's presentation (it's a pdf at their site, under investor relations) and you'll see their projections for costs up to 2012.

Vroems said...

I see.
Total cost cutting of 35% in 5 to 10 years.
I find that a little disappointing actually.
Oil and gas will have to go up substantially to achieve grid parity.
But they will sooner or later I gues.

I understand that Indium only comes as a byproduct of zinc mining and thus has a limit. Who knows?
That being right it should keep the silicon horse alive yes.
Very interesting.