Thursday, September 4, 2008

LDK Reactor Contract - GT Solar - 9/4/08

LDK Solar Signs Polysilicon Reactor Agreement With GT Solar for an Estimated Value of $32 Million

"LDK Solar Co., Ltd., a leading manufacturer of solar wafers, today announced it has signed a new agreement with GT Solar International, Inc. (Nasdaq: SOLR) ("GT Solar") to purchase polysilicon CVD reactors for installation in LDK Solar's manufacturing facilities in Xinyu City, Peoples Republic of China. This equipment is used to make polysilicon. The estimated value of the contract is $32 million.

"We are pleased to have signed this new agreement with GT Solar, a valued provider with which we have a long-standing relationship," said Xiaofeng Peng, LDK Solar's chairman and chief executive officer. "As the demand for solar energy continues to grow, so does our need to increase and accelerate our manufacturing capacity. With GT Solar's reactor and DSS furnace technologies and expertise, we feel confident that we will be able to meet our rising production goals."

"During the more than five years that GT Solar has been conducting business in China, we've designed manufacturing processes and supplied equipment to some of the country's largest solar wafer and cell producers, including LDK Solar," said Tom Zarrella, president and chief executive officer for GT Solar. "We look forward to continuing our work with LDK Solar, and to helping this company further its position as a leader in low cost solar wafer manufacturing."

Polysilicon is a highly purified form of silicon that is used to make both semiconductor wafers for microelectronics applications and solar wafers. The chemical vapor deposition process involved in the production of polysilicon takes place in a specialized CVD reactor using a variety of complex chemical processes."



This is great news!

Why? Well, there are Wafer Deals, and there are Poly Deals. There are Foreign Deals, and there are US Deals. This is a combination of the best two options.

Obviously, WS is perfectly capable of selling off wafer deals.

For one thing, traders are well trained by now to sell these off. Plus, with Asensio and a WAVE of short spammers on the boards, there has clearly been additional pressure to sell.

For another thing, ultimately, LDK's wafer business is completely dependent on the success of their poly prodution business. Wafers are valuable, but Poly is absolutely critical.

Therefore, this is a great deal for LDK.

No, it's not poly production, that's still coming soon, but it reinforces their intense dedication to massive quantities of Poly Production. It also reinforces the relationship between LDK Solar of China, and GT Solar of the United States. Not only is it supportive of GT's commitment to LDK, but it also reflects on GT's confidence in signing an equipment deal for valuable Technology with a Chinese Company. It speaks to the Integrity of LDK in terms of Intellectual Property.

In conclusion, a reiteration of the mutually beneficial relationship between LDK Solar and GT Solar is a very comforting bit of news.



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