Greentech InDetail POLYSILICON: SUPPLY, DEMAND ...

POLYSILICON: SUPPLY, DEMAND & IMPLICATIONS FOR THE PV INDUSTRY

Greentech InDetail

AUTHOR.

TRAVIS BRADFORD, the Prometheus Institute

greentechmedia:research

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GREENTECH INDETAIL JUNE 2008

COPYRIGHT 2008, GREENTECH MEDIA INC. AND THE PROMETHEUS INSTITUTE ALL RIGHTS RESERVED


POLYSILICON: SUPPLY, DEMAND & IMPLICATIONS FOR THE PV INDUSTRY 2COPYRIGHT 2008, GREENTECH MEDIA INC. AND THE PROMETHEUS INSTITUTE ALL RIGHTS RESERVED

TABLE OF CONTENTS

1 Summary: Sliding down the backside of the silicon shortfall 51.1 Majors Expand Capacity 5

1.2 New Siemens Producers Grow 5

1.3 Met-Grade Solutions Bloom 6

1.4 2008 Guidance Remains Firm 7

1.5 2010 and Beyond 8

2 Polysilicon Processing 92.1 Solar Grade vs. Electronic Grade1 9

2.2 From Silica to Metallurgical Silicon (MG-Si) 9

2.3 Metallurgical Silicon (MG-Si) Processing 11

2.4 Silicon Ingots: Monocrystalline vs. Multicrystalline 12

3 Feedstocks – Metallurgical Silicon, TCS, and Silane 153.1 Metallurgical Silicon Feedstock 15

3.2 Conversion Technology and Processes 16

3.3 TCS Feedstock 20

3.4 Silane Feedstock 20

4 Polysilicon Production 234.1 History of Polysilicon Production and Price 23

4.2 The Silicon Shortage (2005-2008) 24

4.3 Evolution of Contract Terms for the Industry 25

4.4 Polysilicon Production Capacity Today 26

4.5 Geography of Global Polysilicon Capacity 26

4.6 Polysilicon Production Cost and Price 27

5 Pulling and Wafering 315.1 Pulled Ingot vs. Cast Ingots vs. Ribbon/Sheet 31

5.2 Wafering 35

5.3 Capital Equipment Manufacturers 36

5.4 Economics of Wafers for PV Cost Structure 38

6 Polysilicon Projections and Forecast Model through 2012 436.1 Prometheus Institute Research Methodology 43

6.2 Polysilicon Capacity Projections to 2012 43

6.3 Polysilicon Production Projections to 2012 45

6.4 Changing Market Dynamics for Polysilicon Producers 49

7 Unwinding the Polysilicon Constraint 517.1 Projected Polysilicon Prices and Margins 51

7.2 Changing Industry Structure 52

7.3 New Silicon Processing – Upgraded Metallurgical Silicon 53

7.4 Emergence of Alternatives: Gains in Thin-Film Production 54

7.5 Concluding Thoughts 55

8 Appendices 578.1 Current Producers 57

8.2 Current Technology 77

8.3 Alternative Technology 103

8.4 Polysilcon Recyclers 119

8.5 New Silicon Producers 127

9 References 133


COPYRIGHT 2008, GREENTECH MEDIA INC. AND THE PROMETHEUS INSTITUTE ALL RIGHTS RESERVED POLYSILICON: SUPPLY, DEMAND & IMPLICATIONS FOR THE PV INDUSTRY 3

LIST OF FIGURESFigure 1.1: Projected Polysilicon Production through 2012 (By Company) 6Figure 1.2: Projected Poly-based Cell production- Adjusted for Inventory and Production Effects 7Figure 1.3: Projected Polysilicon Production through 2012 (By Technology) 8

Figure 2.1: Silicon metal 9Figure 2.2: Silicon Production 10Figure 2.3: Production of metallurgical silicon (metal silicon, MG-Si) 10Figure 2.4: Percent of polysilicon produced by technology, 2005 and 2010 11Figure 2.5: Chunk and Granular Polysilicon 11Figure 2.6: Sample route for refi ning MG-Si 12Figure 2.7: Monocrystalline vs. Multicrystalline 12Figure 2.8: Czochralski (CZ ) diagram 13Figure 2.9: Float zone diagram 13Figure 2.10: Cast Ingot 14

Figure 3.1: Silicon Value Chain 15Figure 3.2: Siemens Reactor 16Figure 3.3: Silicon from Silane process 17Figure 3.4: Fluidized Bed Reactor (FBR) 18Figure 3.5: Elkem’s Route 19Figure 3.6: VLD Process 19Figure 3.7: Tokuyama VLD Semi-commercial Plant 19Figure 3.8: Direct Carbothermic Reduction in SOLSILC 20Figure 3.9: Praxair’s Shanghai facility 21

Figure 4.1: Chunk and Granular Polysilicon 23Figure 4.2: Historical Polysilicon Supply & Demand 23Figure 4.3: Competitive landscape by volume 24Figure 4.4: Geographic distribution of polysilicon production as a percent of total prouction capacity 24Figure 4.5: Map of production 27Figure 4.6: Polysilicon Blended Contract Price 28Figure 4.7: Recently Annouced plants and their costs 28Figure 4.8: Polysilicon Costs and Profi t of Fully Loaded 15% Crystaline Module ($3.65/W) 29

Figure 5.1: Single vs Multi Crystalline Silicon 31Figure 5.2: Single Crystalline Silicon Structure 32Figure 5.3: CZ Diagram 32Figure 5.4: FZ Process 32Figure 5.5: FZ Process 33Figure 5.6: Multi Crystalline Silicon Structure 33Figure 5.7: Crucible used in Casting techniques 33Figure 5.8: Cast Ingot being cut in smaller blocks 34Figure 5.9: EFG Equipment for Ribbon Growth 34Figure 5.10: String Ribbon machines and diagram 35Figure 5.11: PV Module Effi ciency Status and Forecast 35Figure 5.12: Silicon Tricks being sliced up into wafers 35Figure 5.13: Wire Saws 36Figure 5.14: CGS Products 37Figure 5.15: GigaMat products 38Figure 5.16: Comparison of Monocrystalline Silicon Module, Multicrystalline, and Ribbon Sheet Mfg. Cost 41

Figure 6.1: Company-specifi c Polysilicon Capacity Forecasts Through 2012 44Figure 6.2: Cumulative Capacity 2006-2012 45Figure 6.3: Company-specifi c Polysilicon Production Forecasts Through 2012 46Figure 6.4: Polysilicon Market Share by producer, 2007-2012 47Figure 6.5: Chinese Projects – Capacity, 2008-2012 47Figure 6.6: Potential Capacity for Emerging Polysilicon Producers 48Figure 6.7: Total Polysilicon Production Estimate through 2012 50

Figure 7.1: Polysilicon Projected Capacity 51Figure 7.2: Polysilicon Blended Contract Price ($/kg) 51Figure 7.3: Polysilicon Spot Price ($/kg) 52Figure 7.4: Polysilicon Costs, Prices and Manufacturer’s Gross Margin 52



Travis founded the Prometheus Institute in 2003. Prior to founding the Prometheus Institute,

Travis was a partner at Steel Partners II L.P., a hedge fund based in New York investing in

publicly traded and privately owned businesses. In this capacity, Travis served as a board

member and active management participant in businesses ranging from industrial fi lters to

fertilizer distributors.

Travis is the author of Solar Revolution: The Economic Transformation of the Global

Energy Industry (MIT, 2006). He has worked for the Federal Reserve Bank, lectured at

top universities including Columbia University, Duke University, and New York University

on fi nance and entrepreneurship, and is co-author of a paper in the Journal of Applied

Corporate Finance entitled “Private Equity: Sources and Uses.” He is also a partner at Atlas

Capital, a hedge fund based in Cambridge, Mass.

About the Author



1 SUMMARY

SLIDING DOWN THE BACKSIDE OF THE SILICON SHORTFALLPolysilicon 2008 is the latest in our bottom-up analysis of the polysilicon industry with

forecasts updated through 2012. The results of our research reveal the product of much

effort over the last few years by manufacturers, both old and new, in the polysilicon supply

chain. 2008 will fi nally begin to see the substantial additions to virgin Siemens polysilicon

plants that were originally planned beginning in 2005, the year that the polysilicon shortage

began to be widely recognized.

After 24 to 30 months of construction, many of these plants are nearing completion and will

start ramping up their output in the second half of this year. Given the long lead time for the

plants, the forecasts through 2009 are still quite solid and track our 2007 forecasts, but our

survey and report have shown that substantial new capacities will come on line by 2010 at

plants recently funded and commenced are completed by then. A summary of the results

is outlined below.

1.1 Majors Expand CapacityThe big seven traditional polysilicon producers continue to expand their capacity at varying

rates. Most of them plan to complete new plants or expansions in 2008 including REC,

MEMC, Wacker, and Hemlock. Many of these will begin shipments in 2008, but the bulk of

the polysilicon from these expansions will come up to full scale by early next year. Further

expansions through 2012 will see the cumulative output of these companies grow by a

minimum of three-fold from 2006 levels. Many of them have left the door open to further

expansions based on customer demand.

The expansions have proceeded generally smoothly, but some have encountered minor

diffi culties. MEMC’s expansion in Pasedena, Texas was beset with technical issues that

required additional maintenance, while REC’s new fl uidized bed reactor plant was somewhat

delayed by longer than expected building and higher costs. REC now expects the plant to be

on-line next year. (NB: our 2007 forecast had anticipated this delay.)

1.2 New Siemens Producers GrowThough faced with the diffi cult task of completing large-scale plants, some new producers of

polysilicon that use traditional Siemens technology are close to completing their initial plants.

Two, in particular, have shown tremendous ability in managing the complex process, one

we have been following for some time and another new to our list. The fi rst, DC Chemical in

Korea, should have its 5,000 ton plant online and ramped this year. DC is already planning

a second 10,000 ton plant for 2009-2010. LDK of China has come on very quickly with

a similar phase expansion, and photos are available on the Web to witness their amazing

progress.

Many more are progressing as well. China has dozens of stated plants, though most will

likely not achieve the necessary scale and speed to be competitive. In fact, Trina Solar in

China has already backed out of its plans to build a plant. Nitol in Russia has an initial 3,600

ton plant, but is having diffi culty raising capital for further expansions, notwithstanding a

recent minority investment by Suntech of China. Finally, a few others are in the advanced

planning or building stage including M. Setek of Japan, Isofoton’s consortium in Spain, and



Hoku in the U.S. Dozens of others are claiming progress, but we predict few of them will

ultimately be successful, both technically and fi nancially.

1.3 Met-Grade Solutions BloomA real boost to the supply of polysilicon came from new producers using upgraded

metallurgical feedstock. Three met-grade poly producers, Elkem in Norway, Dow Corning

in Brazil, and recent rising star Timminco of Canada all have meaningful additions planned

in coming months. While initial results from users indicate that these materials will be

used in blends with virgin polysilicon, some are planning to quickly move to pure use of

the feedstock. Timminco has had some surprisingly strong results recently, even though

impurity levels are reported at the high end of the allowable range.

Figure 1.1: Projected Polysilicon Production through 2012 (By Company)

Company 2006 2007 2008E 2009E 2010E 2011E 2012ECurrent ProducersHemlock US 8,850 10,005 12,320 16,815 21,000 25,250 31,750Wacker DE 6,000 6,500 13,375 14,500 18,500 22,500 22,500Tokuyama JP 5,350 5,400 5,500 6,900 8,200 8,200 8,200MEMC US/IT 4,100 5,125 7,350 10,600 12,650 13,400 14,900

REC US 5,250 5,633 6,667 10,350 13,450 13,500 13,500Mitsubishi JP 3,000 3,225 3,300 3,495 3,874 4,262 4,689Sumitomo JP 850 1,100 1,350 1,400 1,400 1,400 1,400Current Producers Total: 33,400 36,988 49,862 64,060 79,074 88,512 96,939

New Entrants - Current TechnologyDC Chemical (Siemens) SKorea - - 2,500 7,000 15,000 15,000 15,000Isofoton / Endesa JV ES - - - 2,500 2,500 2,500 2,500Hoku Scientifi c US - - - 50 250 575 1,875M. Setek JP 100 300 1,350 4,600 6,850 10,000 10,000LDK CH - - 3,000 10,500 15,000 15,000 15,000Emei CH 110 295 435 900 3,050 4,800 4,800CSG CH - - - 150 900 1,500 1,500Lucyang China Silicon CH 200 700 1,000 1,500 2,500 3,000 3,000Sichuan Xinguang CH - 100 730 1,260 1,260 1,260 1,260Other China CH - 130 1,242 3,752 6,335 7,630 7,870Nitol RU - - 300 2,400 3,600 3,600 3,600Crystall / Russia and FSU RU 30 360 930 3,200 8,950 12,700 14,700New Entrants - Current Technology Total: 440 1,885 11,487 37,812 66,195 77,565 81,105

New Entrants - Metallurgical Grade+ BlendsElkern Norway - - 2,500 5,000 10,000 15,000 15,000Joint Solar Silicon GmbH DE - - 425 925 1,000 1,000 1,000JFE Steel JP - - - 50 150 300 400SolarValue AG DE - - - 2,200 4,850 5,300 5,300Dow Corning Corp. Brazil 500 2,000 3,000 4,750 8,250 12,500 15,000Becancour Silicon (BSI) Canada - 150 1,950 9,000 14,400 14,400 14,400AE Polysilicon US - - 750 1,500 6,750 12,000 12,000Silicium De Provence FR - - - - 2,000 4,000 4,000Scheuten SolarWorld DE - - - 500 750 1,000 1,000New Entrants - Metallurgical Grade + Blends Total:

500 2,150 8,625 23,925 48,150 65,500 68,100



The great advantage of these companies will be the low amount of capital and shorter lead

times to add meaningful capacity. Other new entrants like AE Polysilicon’s FBR plant in the

U.S. may not share those advantages, but many of these entrants will signifi cantly add to

global polysilicon capacity and production in the next few years. (See Figure 1.3.)

1.4 2008 Guidance Remains FirmAggregating the results from our survey, we updated our forecast to include all planned

production from existing producers. We also added in a percentage of the forecast production

from the emerging producers using both traditional technologies and new technologies.

The percentage used in 2008 was the same as in prior forecasts (60 percent), but was

reduced in subsequent years (50 percent in 2009 and then 40 percent beyond). These de-

rate factors should more closely approximate actual results as the diffi culty fi nancing and

ramping new plants in a period of rising plant construction costs and looming new supply

continues to rise. Finally, our methodology adjusts for polysilicon use in and returned from

the semiconductor industry and some inventory effects to account for existing non-standard

inventories and channel inventory throughout the supply chain.

The result is a growth in polysilicon-based cell, and module production will grow by 60 to 70

percent in each of the next couple of years; total module supply will grow by over 80 percent

in each of those years when thin fi lm is added in. This reinforces our belief that supply will

grow faster than demand in each of those years and should result in a substantial price

decline for modules through 2010. The precise degree and timing of that trend is subject

to the remaining uncertainty surrounding the renewal of both the U.S. and Spanish national

support programs for PV.

The major plants in 2008 that matter for our forecast include Hemlock, Wacker, and MEMC,

as well as the plants being built by DC Chemical and Elkem among half a dozen other plants

that are near completion. Using our conservative methodology and de-rating factors for new

plants, we are highly confi dent in our forecast numbers for 2008 and 2009.

Figure 1.2: Projected Poly-based Cell production- Adjusted for Inventory and Production Effects

Total Polysilicon Supply:2006 2007 2008E 2009E 2010E 2011E 2012E

Current Producers 33,400 36,988 49,862 64,060 79,074 88,512 96,939New Entrants - Current Tech 440 1,885 11,487 37,812 66,195 77,565 81,105New Entrants - Alternative Tech 500 2,150 8,625 23,925 48,150 65,500 68,100

Plus: 60/50/40% of likely new entrants 34,340 41,023 61,929 94,928 124,812 145,738 145,621Plus: Excess Production 2,338 3,699 3,740 3,203 1,977 - -Less: Semiconductor Demand (21,500) (22,150) (24,808) (27,785) (31,119) (34,853) (39,036)Plus: Recycling (22% of IC) 4,730 4,873 5,458 6,113 6,846 7,668 8,508Plus: Inventory effects 3,258 2,625 (234) (5,440) (2,958) (1,674) (871)

Poly for Solar 23,166 30,070 46,084 71,019 99,558 116,878 125,302Grams/Watt 10.0 9.1 8.7 8.2 7.8 7.6 7.5

MWP Equivalent supply (cell) 2,317 3,304 5,297 8,661 12,764 15,379 16,707



1.5 2010 and BeyondIt remains very diffi cult to gauge supply beyond 2010 due to the simple fact that the decisions

to build new capacity for that time frame would not yet need to be made. We believe that

the combination of additional supply in our forecast, the introduction of new technologies

that can be scaled up more quickly, and the twin competing technologies of thin-fi lm PV and

large-scale concentrating solar will limit the growth of demand for Siemens-based polysilicon

plants in that time frame. Only yet-to-be-revealed economics will determine the degree to

which that forecast is accurate.

Figure 1.3: Projected Polysilicon Production through 2012 (By Technology)



2 POLYSILICON PROCESSING

2.1 Solar Grade vs. Electronic Grade1 Silicon is limitless in supply and the second most

abundant element in the earth’s crust. In nature,

it is found as an oxide (in the form of sand and

quartz) and as a silicate (in the form of granite, clay,

and mica)2. Silicon is offered in a variety of purity

levels or grades and the type of impurities are also

important: carbon and oxygen are less signifi cant;

while, boron and phosphorus concentrations must

be managed since they are key in the electrical

functioning of a cell.

Pure silicon is necessary for the production of ultra-pure silicon wafers used in the

semiconductor industry. Ultra-pure silicon can be doped with other elements to adjust

its electrical response by controlling the number and charge (positive or negative) of

current carriers. Such control is necessary for transistors, solar cells, integrated circuits,

microprocessors, semiconductor detectors, and other devices in electronics and other

high-tech applications. For silicon to be a useful semiconductor material, it must be highly

purifi ed and therefore must undergo a signifi cant amount of processing. Purifi ed silicon for

the semiconductor industry is referred to as polycrystalline silicon or polysilicon (poly-Si or

poly).

For solar cells (solar grade or SoG), the silicon must be 99.9999 percent pure (often referred

to as “six nines” or 6N pure)3, while the silicon grade used in electronics (electronic grade

or EG) is even more pure (from 9N to 11N). Historically, silicon used in solar cells has come

from off-spec and waste silicon that is rejected by the electronics industry, produced either

during the polysilicon purifi cation process or during ingot and wafer production.

But this is no longer the only source of polysilicon for the PV industry. Since solar industry

demand has surpassed the off-spec silicon production, silicon has become a scarce

commodity. Since 2004, the solar industry was forced to buy EG silicon4, until specifi c

6N silicon production for PV industry has become available, thanks to new manufacturers

focused on serving exclusively the solar industry demand. In addition, new technologies

are being developed to produce silicon that caters to solar companies needs, putting into

evidence that there is potential to clear the bottleneck for PV production.

2.2 From Silica to Metallurgical Silicon (MG-Si)Silicon used in the semiconductor and PV industry must go through several steps before it is

a practicable feedstock. Figure 2.2 illustrates one route from silica mining to the solar module

or integrated circuit using the Siemens purifi cation process. This section will describe the

process from mining to metallurgical silicon (referred to as metallic silica in the fi gure). The

next section will discuss the routes for further purifi cation.

The fi rst step in polysilicon production is the extraction of quartz from a silica mine. The

Silicon supply has become the bottleneck for the growth of the PV industry.

Figure 2.1: Silicon metal

Source: Shin-Etsu Group



quartz is then put into

a furnace with a carbon

source – a mixture

of coal with coke,

woodchips, or charcoal.

The mixture is then

heated and the silicon

reduced in a process

called Carbothermic

Reduction. With

this process, carbon

dioxide, silica fumes,

and liquid silicon are

obtained. The silica

fumes are used for other

industrial processes,

while the liquid silicon

is poured out of the

furnace. The liquid is

further refi ned and then allowed to solidify. The resulting silicon material is referred to as

metallurgical silicon or metal silicon (MG-Si). Producers then crush the MG-Si before it is

sold. The purity level at this stage

is 96-99 percent, with an average

purity of 98.5 percent. MG-Si is

in abundant supply and its cost,

being relatively low, has decreased

in the last couple of years. The

current cost of MG-Si is around

$0.38/kg, a sharp decrease from

$1.70/kg in 20055.

In the U.S., MG-Si production

was 148,000 MT in 2005, while

global production accounted

for more than 1 million MT.

Approximately 50 percent of MG-

Si produced in a year is used by

the aluminum industry, while the

other 50 percent serves in various

chemical processes. MG-Si is not

pure enough for use in integrated

circuits or PV cells; therefore, further refi ning is necessary.

There are several ways in which MG-Si can be refi ned. We will describe these processing

options on the following pages.

Source: Tokuyama

Figure 2.2: Silicon Production

Figure 2.3: Production of metallurgical silicon (metal silicon, MG-Si)

Source: Elkem



2.3 Metallurgical Silicon (MG-Si) ProcessingMost of the polysilicon used by the semiconductor and PV industry is produced via a process

of chemical deposition. The Siemens process – named after the company that developed

it – is the most widely used, however there are other technologies to produce polysilicon,

such as the fl uidized bed reactor (FBR), which is developed by Ethyl Corporation, among

others. The processing methods are described in more detail in section 3.

In the production process via chemical deposition, a chlorosilane gas is deposited onto a

heated rod. The Siemens process uses trichlorosilane gas (TCS) as the deposition material.

Another process further refi nes TCS to produce monosilane (SiH4). The fi nal product of

the above two processes is a rod of polysilicon that is broken up into smaller pieces and is

called “chunk polysilicon”. The advantages

of this process include high deposition rate

and high volatility.

Polysilicon can be also produced using

fl uidized bed reactor (FBR) with a fi nal

product of granular silicon. The theoretical

advantages of this process are lower capital

and electricity costs than Siemens reactors.

To date, however, only a couple of producers

have established FBR capabilities, so the

production economics are still unclear.

In an attempt to lower silicon production

costs, as well as to ensure feedstock is

available to the PV industry, methods dedicated specifi cally to solar grade silicon have been

Figure 2.4: Percent of polysilicon produced by technology, 2005 and 2010

Figure 2.5: Chunk and Granular Polysilicon

Source: MEMC



under development. This research includes variations on existing purifi cation processes, as

well as completely novel processes. To date, minimal amounts of product have resulted from

this research, though many companies have promised product over the next few years.

Upgraded Metallurgical Silicon (MG-Si)Upgrading the metallurgical silicon process has the potential to be a cost effective way to

produce silicon for the PV

industry. Companies such

as Dow Corning, Elkem,

and others are pursuing this

route to solar grade (SoG)

silicon manufacturing.

The process involves a

series of refi ning steps

and the employment of

directional solidifi cation

(described in more detail

in section 2.4). While this

route offers the promise of

lower costs compared to the

Siemens process, product

quality remains an issue. To

date, only Dow Corning is commercially producing SoG from MG-Si, though quality is not

high enough for the product to be used on its own; it must be blended with purer silicon.

Elkem has not yet brought its technology to commercial scale, though it has ambitious plans

to do so by 2008.

2.4 Silicon Ingots: Monocrystalline vs. MulticrystallineWafer and cell producers receive the silicon in chunk or granular form, but then need

to shape it into a form that can be sliced, such as an ingot, block, ribbon, or sheet. The

product can also be monocrystalline (single crystal) or multicrystalline (polycrystalline).

Monocrystalline silicon features a uniform

alignment of silicon molecules in three

dimensions, whereas multicrystalline silicon

is an aggregation of small silicon crystals6.

The Czochralski (CZ) and fl oat zone

methods produce monocrystalline ingots,

while directional solidifi cation/casting,

ribbon, and sheet techniques produce

multycrystalline structures.

Monocrystalline Ingots: Czochralski (CZ) and Float ZoneThe CZ process is a method of crystal growth, named after Polish scientist Jan Czochralski,

who discovered it in 1916 while investigating the crystallization rates of metals. Czochralski

Figure 2.7: Monocrystalline vs. Multicrystalline

Source: Tokuyama

Figure 2.6: Sample route for refi ning MG-Si

Source: Crystal Systems



crystal growing starts with melting the silicon in a crucible.

Then a rod with a silicon seed is dipped into the molten

silicon and as it is drawn up, a monocrystalline silicon

crystal is grown on the seed crystal. Figure 2.8 illustrates

the concept of CZ pulling. In 2005, monocrystalline wafers

made from CZ wafers accounted for 35 percent of global

production. CZ pulling takes

a signifi cant amount of time

and is more expensive than

the other methods, but the

resulting cells have some

of the highest conversion

effi ciencies in the industry.

Float zone ingot formation is used for producing even more

pure wafers. A fl oat zone ingot has fewer impurities than a

CZ ingot; and is particularly lower in oxygen, which can

decrease the effi ciency of a cell. As with CZ crystal pulling, a

seed crystal is exposed to molten silicon. But instead of being

dipped into a crucible with a silicon melt, a heating coil passes

along an ingot, effectively separating the newly crystallized

monocrystalline ingot from the input silicon. Crystallization

occurs between the solid and molten regions referred to as

the “fl oat zone” (Figure 2.9).

Multycrystalline Ingots: Directional Solidifi cation/Casting and Ribbon/SheetMulticrystalline blocks are formed via directional solidifi cation or casting. While this process

takes less time than monocrystalline production, effi ciencies are lower due to the variable

silicon crystal sizes, dislocations, and impurities.

With directional solidifi cation, the silicon remains in the crucible after heating. Once the

silicon is melted, the entire crucible is moved down, away from the heating element and

the silicon solidifi es as it cools. Casting can take place in the crucible in which the silicon is

melted or the silicon can be poured into a second crucible. Figure 2.10 shows the process

of casting.

The ribbon and sheet methods have been developed to reduce the amount of slicing, and

thus waste associated with the above methods. The fi rst, String Ribbon technology, is a

proprietary technology employed exclusively by Evergreen Solar. A crucible melts the silicon,

and then two ribbons of silicon are pulled up out of the crucible. Once the ribbons are

slightly less than two meters long, they are removed and sliced into wafers.

A second method is Edge-defi ned Film-fed Growth (EFG), developed and exclusively

employed by Schott Solar. In this process, an octagonal hollow tube is pulled up from a

Figure 2.8: Czochralski (CZ ) diagram

Source: EERE

Figure 2.9: Float zone diagram

Source: University of Delaware



silicon melt. Once it reaches six meters, the tube is removed

from the machine and sliced into wafers with a laser.

Crystal Growing Systems (CGS) and Schott Solar recently

succeeded in improving the Edge-defi ned Film-fed Growth

(EFG) process for wafer production. Previously, Schott

employed octagonal EFG process, which produces 8-sided

tubes of silicon that are then separated with a laser, but now

the two companies have developed a process for 12-sided

(dodecagonal) tubes. While the increase in silicon pulled

obviously has productivity benefi ts, the thickness of the

12-sided tubes is also reportedly more homogeneous. Both

factors could offer signifi cant cost advantages over current

methods.

Figure 2.10: Cast Ingot

Source: EERE



3 FEEDSTOCKS – METALLURGICAL SILICON, TCS, AND SILANE

The basic component of a solar cell is silicon, which is the second most abundant material

in the crust of the planet, but it is not pure in its natural state. Naturally occurring Silica

(Silicon Dioxide) is reacted with carbon to make metallurgical-grade silicon.

Metallurgical silicon (99 percent purity) is used to produce ultra-pure silicon (Eight 9s or

99.9999999 percent purity) for electronic and photovoltaic (PV) applications. Ultra-pure

silicon can be doped with other elements to adjust its electrical response by controlling the

number and charge (positive or negative) of current carriers.

Such control is necessary for transistors, solar cells, integrated circuits, microprocessors,

semiconductor detectors, and other semiconductor devices which are used in electronics

and other high-tech applications. As the solar energy industry grows, the challenge for

coming years is to generate an effi cient chain of silicon feedstock supply.

Faster development of alternative silicon purifi cation techniques and cell technology can

partially compensate for the increase in demand. Solar cell developments increase power

output and decrease silicon usage (i.e., thinner wafers). Many feedstock providers are

increasing capacity and are also developing purifi cation techniques.

3.1 Metallurgical Silicon Feedstock

Metallurgical Silicon is in widespread use in many industries and the worldwide production

is nearly 1 million metric tons per year. The main pollutants in the material include

Source: Deutsche Solar

Figure 3.1: Silicon Value Chain



iron, aluminum, phosphorous, and boron7. Historically only about 5 percent of the total

metallurgical silicon produced has been used in the electronics or PV industry.

While ample global supplies – some 20 times the current use in solar applications – suggests

that there is not likely to be a global shortage of metallurgical silicon, but prices recently have

been on the rise. Schmid of Germany has reported that the price for metallurgical silicon as

reported by CRU, an industry tracking organization, has risen from around 1.20 Euro per

kg ($1.76 at today’s prices) in 2005 to over 1.80 Euro per kg ($3.05) at the end of 2007.

Though still a small amount of the total cost structure of polysilicon for solar applications,

further price increases could negatively affect the economics of its production.

3.2 Conversion Technology and ProcessesThe production of solar grade (SoG) silicon is the basis for the photovoltaic (PV) industry’s

value chain. The traditional route to extracting semiconductor silicon is shown in on the left

hand side of Figure 3.1. Currently, scrap as well as rejected and non-prime material from this

production is the main supply route. Up to roughly 40 percent of the produced electronic

grade (EG) silicon lost during production is feedstock for the PV industry. A potential source

of solar grade silicon comes from the direct carbothermic reduction of quartz and carbon,

as indicated on the right side of Figure 3.18.

There are 5 technologies under use to purify silicon. The Siemens reactor and the Fluidized

Bed Reactors (FBR) are the most commonly used and well-known methods. However,

other methods are currently in experimentation or at the testing stage, such as Metallurgical

Grade Silicon (MGS), Vapor Liquid Deposit (VLD), and SOLSILC. The inputs in polysilicon

production include metallurgical grade silicon, silane gas, and TCS gas.

SiemensSiemens’ technology uses a chemical process based on EG

silicon. Major silicon producers such as Hemlock (USA),

Wacker Chemie (Germany), and Tokuyama Soda (Japan)

use the Siemens-type reactor. The input is metallurgical

grade silicon with a purity of 98 percent9. When it reacts

with hydrogen, it is transformed into a gaseous phase. The

gas is distilled and discomposed in fi laments in a bell jar

chemical vapor deposition (CVD) reactor. In the fi nal stage,

depending on the process, trichlorosilane (TCS) or silane

gas can be used. The gas is introduced into a thermal

decomposition furnace or reactor with high-temperature

polysilicon rods inside a cooled bell jar. The temperature

reached in the reactor is around 1,000° C, which translates

into high consumption of energy increasing the price of

the end product.

Figure 3.2: Siemens Reactor

Source: Oslo University College



The advantages of using TCS as the deposition material includes high deposition rate and

high volatility (which makes it easier to remove boron and phosphorous, two compounds

that are problematic in solar cells). Production using silane offers higher purity, but it is also

more expensive.

The fi nal product is a rod of polysilicon that is broken up into smaller pieces (chunk

polysilicon). The product’s characteristic depends on whether TCS or silane gas is used.

TCS is the most common gas used in the Siemens reactors. Inputs for this open-loop

process are metallurgical silicon and hydrochloric acid (HCI). The process consists of a

catalytic decomposition of other gases which have to be recycled.

TCSSiemens reactors have recovery systems with different designs to process the chemical

waste vapor. The basic goal of the recovery system is the separation of TSC and silicon

tetrachloride from HCl and hydrogen gases. The silicon tetrachloride can be converted

either to TSC and used as feedstock, or separated and sold to other industries. Recovered

HCl can be sold to other industries.

Silane

Silane is a chemical compound that uses the chemical formula SiH4. Several industrial and

medical applications exist for silanes. The silane process is based on the application of silane

or monosilane gas instead of TSC gas on the Siemens reactor. It is a closed loop10 process

with high effi ciency of raw material utilization and does not need off-site reprocessing. The

input for the process is metallurgical silicon. Given that the silane is a pyrophoric gas, it

requires careful handling.

Figure 3.3: Silicon from Silane process

Source: REC



The process was developed by Union Carbide in the 1970s through research funding from

the U.S. government to produce solar grade silicon. The funding was then rescinded and

the company’s focus shifted from PV to the semiconductor industry. The company has

changed hands several times, but is now owned by Renewable Energy Corporation (REC)

which has converted it back to a strictly solar grade silicon producer.

Fluidized Bed Reactor (FBR)Fluidized Bed

Reactor (FBR)11

has signifi cant

energy savings

and therefore cost

saving compared

to Siemens’

technology. FBR is a

continuous process

and the reactors

have hot walls

instead of cold walls as in the Siemens reactors, therefore requiring less energy to purify

the silicon. However, the polysilicon obtained is less pure than that obtained by Siemens’

reactors, but it is pure enough to be used in solar cells production and also for electronic

uses.

The process works with either TCS or silane gas. The gas is deposited on small particles.

which provide a surface area that can be more than 100 times larger than a traditional

Siemens reactor. The stages of the process are the same independent of whether or

not silane or TSC is used, but there are some differences in the end product. The gas is

introduced into a tube-like reactor in which small polysilicon granules are suspended in the

gas steam. The end product is in the form of granular polysilicon.

TCSTCS is refi ned through a chain of purifi cation stages and is then sent to a chemical vapor

deposition (CVD) furnace. The exhaust gases obtained as a result of this process, such as

tetrachloride, are liquefi ed and distilled and marketed separately. The TCS is recycled once

again.

SilaneThe stages of the process are the same as for TCS. The difference is that the output of

the silane process is free from residual gases and therefore, there are savings compared

to processes that demand handling extra gases. In addition, the raw material utilization is

higher and the polysilicon obtained with silane gas is purer.

Metallurgical Grade Silicon (MGS)This method is not yet widely used. Elkem Company developed12 the process in the 1980s

and 1990s with Exxon Company and Texas Instruments. The Elkem silicon purifi cation

Figure 3.4: Fluidized Bed Reactor (FBR)

Source: REC



method uses slag

refi ning and consists of

two steps. The fi rst step

involves a slag refi ning

of the silicon to remove

certain elements and

then, the silicon is

purifi ed from other

elements through a

leaching process. The

energy consumption in

this process is only 20

percent to 25 percent

of traditional polysilicon

production. The main

advantages of the process are low costs, big volumes, and low energy consumption; however,

the process is not yet used in full-scale production.

Vapor Liquid Deposit (VLD) Chemical vapor deposition (CVD)13 is a

chemical process used to produce high-

purity, high-performance solid materials.

In a typical CVD process, the wafer

(substrate) is exposed to one or more

volatile precursors, which react and/or

decompose on the substrate surface to

produce the desired deposit. Tokuyama

developed a new technology that uses

TSC as a raw material, such as Siemens.

The technology is Vapor Liquid Deposition

(VLD), which involves the deposition

of liquid silicon directly from gas in a

tubular reactor. It offers a deposition rate that is

faster than current production methods. The

quality of the end product meets the solar cells’

production requirements but does not yet meet the

requirements of the semiconductor industry.

Tokuyama’s focus relies on making a low-cost

product that would be suitable for solar use. Based

on results from the semi-commercial plant (200

MT), the objective is to provide a cheaper feedstock

material to the solar cell industry, and it is undergoing

the design phase of a large-scale operation.

Figure 3.7: Tokuyama VLD Semi-commercial Plant

Source: University of Konstanz

Figure 3.6: VLD Process

Source: Tokuyama

Figure 3.5: Elkem’s Route




SOLSICThis technology14, currently under

development, aims to produce

polysilicon based on carbothermic

reduction through a two-step high

temperature plasma process.

For this process to work, it is

essential to carefully select the

quartz and carbon black used as

raw material. Costs of production

can be reduced, if the process

is scaled. The fi rst series of end

products resulted in polysilicon with a purity of 99.95 percent, requiring further development

of the technology to achieve the quality required.

3.3 TCS FeedstockTCS is used in many polysilicon production processes and the volume required is vast. For

example, LXE LXE recently secured two contracts to provide the technology to manufacture

108,000 MT per year of TCS. It takes a tremendous amount of TCS to make polysilicon.

Results reported by LXE suggests that it takes some fi ve to six times the amount of TCS (by

weight) to produce polysilicon. For example, a 5,000 ton per year polysilicon plant would

required 90,000 tons of TCS.

Major TCS Suppliers Include:

LXELXE,15 a Nevada corporation, is one of the fastest growing providers of TCS technologies to

the solar industry. Founded in July 2007 by Dr. George Xiao, LXE, in the fi rst six months,

secured two contracts to provide the technology to manufacture 108,000 MT per year of

TSC to produce 18,000 MT of polysilicon annually.

Air ProductsAir Products16 (NYSE: APD) serves customers in industrial, energy, technology, and

healthcare markets worldwide with a unique portfolio of atmospheric gases, process and

specialty gases, performance materials, and equipment and services.

3.4 Silane FeedstockSilane-based-gases are not strictly used solely in the PV industry. It is also used in

semiconductor production, as well as fl at panel, thin-fi lm transistors, and liquid crystal

displays. All of these industries compete for the supply of the high-purity gas. Defi nitely, the

largest consumer is the semiconductor industry, which is growing rapidly and has high-end

product prices.

While silane is likely to be in ample supply in the long term, recent surging demand from


Figure 3.8: Direct Carbothermic Reduction in SOLSILC



the polysilicon manufacturing industry, as well as the amorphous silicon (a-Si) thin fi lm PV

industry, has caused short term prices to rise. In April of 2008, Praxair and Air Liquide

raised prices for silane by 20 percent to 30 percent.17

Major Silane Suppliers Include:

Renewable Energy Corporation (REC)The REC group18 is the world’s most integrated solar energy company. The group has

three divisions: (i) REC Wafer, (ii) REC Solar, and (iii) REC Silicon. REC’s silicon division is

the world’s largest dedicated producer of silicon materials for the photovoltaic industry. It

produces polysilicon and silane gas for the PV as well as for the electronics industry. The

company operates two plants in the U.S., which are located in Moses Lake, Washington and

Butte, Montana.

According to the company, REC is the largest silane producer in the world, and plans an

expansion in its capacity of 20,000 MT per year of silane production by the end of 2008.

REC’s $50 million silane plant investment also implies improvements in the Siemens reactor

operations. The project will add 9,000 MT per year of silane gas production capacity.

Air LiquideAir Liquide19 is a world leader in industrial and medical gases. Founded in 1902, the

company operates in over 70 countries and is a supplier of a variety of different PV specialty

gases.

Air Liquide and Denka have decided to launch a large new initiative with the construction of

a world scale unit in Japan to meet growing market demand. With this additional silane unit,

Air Liquide’s total manufacturing capacity with extension-ready capability will more than

triple to 2,000 tons per year in a further step. The unit will be operational by 2010.

Even though production capacity is rapidly

increasing, there is no certainty about

whether it will be suffi cient to supply ever

increasing demand or not. It is estimated

that a major part of the expansion projects

will be fi nished in the fi rst half of 2008 and it

will take six to nine months to ramp up.

PraxairPraxair20 Inc. (NYSE: PX) is a global Fortune

300 company that supplies atmospheric,

process and specialty gases, high-

performance coatings, and related services

and technologies to a wide variety of customers. Praxair offers photovoltaic cell or module

manufacturers and polysilicon producers a complete portfolio of process gases, gas delivery

systems, deposition materials, and supply chain management services.

Figure 3.9: Praxair’s Shanghai facility

Source: Praxair





4 POLYSILICON PRODUCTION

Here are a few notes about the process and

conventions for our data collection.

In this report, we consider production

capacity to be equal to the nameplate

amount of polysilicon a plant will produce

in a given year. However, this is a base

estimate, as the capacity can be 5 percent to

10 percent higher depending on the desired

quality of the product and improvements in

the manufacturing process over time (such

as de-bottlenecking).

In our estimates, we attempted to normalize

the production capacity fi gures by breaking

fi gures down between companies that have solid reputations in the industry and clear

production goals, and those fi rms that are less well known or have unclear or questionable

plans. Additionally, we have considered that it is likely that some of the recent expansion plan

announcements, from existing producers as well as new entrants, might not be feasible.

4.1 History of Polysilicon Production and Prices21

Before discussing current and future polysilicon capacity, we will briefl y mention the capacity

and price environment in the previous years in order to contribute to a better understanding

of the current situation.

Figure 4.1: Chunk and Granular Polysilicon

Source: MEMC

Figure 4.2: Historical Polysilicon Supply & Demand

Source: CLSA, Gartner, company reports, analyst reports & MEMC estimates - December 31, 2006



The polysilicon price per kilogram (kg) has historically shifted up and down, due to constant

fl uctuations in supply and demand. From 1997 to 1999, the polysilicon industry was in

a state of oversupply and polysilicon capacity utilization dropped from above 90 percent

to below 80 percent. In 2000, the polysilicon price per kg increased from $30 to $33,

while the industry experienced a brief shortage. However, the following year, polysilicon

prices dropped below $30 per kg, as manufacturers again overshot demand. Consequently,

industry utilization dropped to an all-time low of 62 percent and many factories were closed.

Gross profi t margins fell to zero and below in some cases.

4.2 The Silicon Shortage (2005-2008)Since 2004, semiconductor and solar customers have displayed healthy growth in volume.

As a result, polysilicon producers absorbed their excess capacity and used up available

inventories of product. Since 2006,

the global PV industry has been in

a period of “Silicon Shortage” with

strong policy-led demand for modules

dwarfi ng the ability for the capital

intensive polysilicon manufacturing

industry to keep up.

Beginning in 2005, the major

polysilicon producers – facing

dropping inventories and strong

demand – began planning and

contracting increases to their capacity

to produce polysilicon. However, due

to the long lead times required to

increase capacity or build a new plant,

the growth in polysilicon capacity has

not been fast enough to support the

increasing demand. In the last few years, polysilicon demand has outpaced supply, and

utilization has soared to around 100 percent (and in some cases beyond 100 percent).

Contract polysilicon

prices have reached

to close to $70 per kg,

as the solar industry

sought to sign long-

term contracts for

polysilicon in the form

of chunks, granules,

ingots, or raw wafers.

Spot prices have risen

to over $400 per kg

for the best grades of

polysilicon.

Figure 4.3: Competitive landscape by volume

Country/Region 2007 2012(Projected)

2012(Potential)

US 43% 43% 27%Germany 21% 11% 8%Japan 20% 15% 10%China 4% 8% 21%Rest of Europe 4% 7% 8%Russia 1% 5% 7%RoW 7% 7% 13%Korea 0% 4% 6%

Figure 4.4: Geographic distribution of polysilicon production as a percent of total prouction capacity



With thousands of MT of new capacity announced since 2005 and currently under

construction, it is likely that the industry will have enough silicon to meet the projected

increasing demand. On the other hand, if the semiconductor industry sees an upturn in

sales, or if public policies are put in place that cause the PV market to expand even more

quickly, polysilicon demand may continue to outpace supply past 2008. Furthermore, if

announced capacities from new market entrants fall through, supply could remain a binding

constraint.

Future production and prices are discussed in further detail in Sections 6 and 7.

4.3 Evolution of Contract Terms for the IndustryAs the industry has been coping with the polysilicon shortage, several trends have become

apparent, such as the long-term supply contracts, upfront payments, and new entrants to

the industry using both traditional and emerging technologies.

As the reality of the polysilicon shortage began to settle in, customers – many of whom had

raised substantial new equity in the public markets to fund capacity expansion – needed

to make sure that they had adequate feedstock for their wafer, cell, and module lines. The

polysilicon producers who had very recently endured a period of diffi culty and overcapacity

required these new customers to enter into very strong contracts to entice them to build new

polysilicon plants. Contract terms included:

Multi-year commitments (5 to 15 years)

Take-or-Pay

Upfront payments of 20 percent to 30 percent of the total contract value

Fixed prices over the life of the contract

Due to the nature of these expensive and high upfront cost contracts, a substantial amount

of the capital being invested in solar companies was being transferred upstream to the

polysilicon manufacturers. By 2007, facing growing supply by existing and new producers,

Tier 1 customers were able to begin to negotiate some slightly better terms for their polysilicon

contracts, including lower upfront payments, shorter contract periods, and declining prices

over the life of the contracts.

Nearly all recent long-term supply contracts still fi x prices for the duration of the agreement

(though some at declining rates). A few examples of recent contracts among players are

detailed as follows:

In August 2007, Wacker Chemie AG and Schott Solar GmbH signed an agreement

establishing two joint ventures for manufacturing and selling silicon wafers to the solar

industry. Wacker will supply hyper-pure polycrystalline silicon for wafers, the majority of

which will be processed into solar cells by Schott.22

REC Wafer, a division of Renewable Energy Corporation (REC), entered into a NOK 5.3



million (approximately $1.04 million) agreement with Photovoltech NV. The terms include

deliveries through 2015, with pre-determined prices and volumes.23

DC Chemical has agreed to supply Evergreen with polysilicon from late 2008 through

2014, with quantities suffi cient to produce 1 GW of modules over the term of the contract.

Concurrent with the supply contract, DC Chemical agreed to invest in Evergreen through a

stock purchase program; the company will also receive additional equity as partial prepayment

for the polysilicon to be delivered in the future. Once the purchase and prepayment are

completed, DC Chemical will hold 14 percent of Evergreen’s outstanding stock.24

Jinglong Group has signed a long-term supply contract with Hemlock Semiconductor

Corporation, in order to expand its annual ingot production capacity from 1,800 MT to 3,000

MT and guarantee the supply of polysilicon.25

Becancour Silicon, Inc. (BSI), a subsidiary of Timminco Ltd. and a world leader in the

production of industrial metals, has entered into a contract to sell high-purity silicon to a solar

cell manufacturer. The contract is BSI’s second commercial contract for high-purity silicon,

and states that BSI will supply 1,500-5,000 MT over fi ve years. The contract reinforces the

continued interest of solar cell manufacturers in high-purity, solar-grade (SG) silicon.26

Renesola Ltd. has closed long-term purchase contracts with Sichuan Yongxiang Polysilicon

Co. Ltd. and Daqo New Material Co. Ltd. The fi rst contract was announced on October

22nd, 2007 and ensures the supply of 200 MT of polysilicon in 2008. The second contract

is for the supply of 150-200 MT of polysilicon in 2008 and 2,000 MT of polysilicon over fi ve

years, starting from the second half of 2008.27

4.4 Polysilicon Production Capacity TodayIn 2007, the global capacity of polysilicon production was 48,900 MT and the major

companies that dominate the industry supply are Hemlock, Wacker, MEMC, Renewable

Energy Corporation (REC), Tokuyama, Mitsubishi, and Sumitomo (Osaka Titanium). For the

fi rst time ever in 2007, the solar industry used more polysilicon than the semiconductor

industry – a trend that is not likely to ever reverse itself given the relative growth rates in

demand for the two segments.

Hemlock, located in the U.S., is the largest of the polysilicon companies, with a production

capacity of 10,010 MT in 2007; it is followed by other U.S. companies, such as Wacker

(10,000 MT), MEMC (6,700 MT), REC (6,000 MT), Tokuyama (5,400 MT), Mitsubishi

(3,300 MT), and Sumitomo (1,300 MT). Additionally, there is a small amount (1,830 MT)

produced by a group of companies located in China.

Each of these companies is discussed in greater detail in the Appendix.

4.5 Geography of Global Polysilicon Capacity28

Figure 4.5 shows the geographic distribution of polysilicon production capacity in 2007 and

2012.



In 2007, the US dominated silicon production, accounting for 43 percent of the supply,

followed by Japan and Germany.

For 2012 potential and projected capacity, we followed the criteria outlined in Section 6. The

geographic breakdown of production capacity will remain pretty stable over the next couple

of years. However by 2012, the production share of U.S., Japan, and Germany are expected

to decrease, while the share of Russia and China will increase (as shown in Table 1). A few

new entrants, most notably Crystall in Russia, LDK in China, and DC in South Korea will

regionally diversify the production through 2012.

While the geographic distribution of polysilicon is relevant, given the relatively low cost of

shipping silicon, it does not necessarily dictate where future markets for PV will develop. In

Section 6, we examine overall polysilicon production in the next fi ve years and offer a forecast

of PV production capacity based on several variables. We also discuss the assumptions of

our projections and perform sensitivity analyses to investigate the range of possibilities for

future industry growth.

4.6 Polysilicon Production Cost and Price

Price of New Polysilicon Manufacturing Capacity The polysilicon industry, regardless of the technology, requires a signifi cant amount of

capital, large amounts of electricity and a highly trained labor force. Historically, the general

rule was that building a polysilicon facility costs $100/kg. For comparison purposes, 5,000

MT plant (or 5 million kg) would cost $500 million to build, take 24 to 30 months, and

could produce enough silicon for 550 MW of annual PV cell production at today’s average

effi ciency rates of 9.1 grams per Watt including waste.

Figure 4.5: Map of production



Recent announcements,

however, show that the range

around those numbers for

Capex per Watt and build

time is quite high based on

many variables. Facilities

in emerging countries like

China and Korea are at the

shorter end of that range, with

5,000 ton recent additions

at LDK and DC Chemical

taking less than 18 months,

and coming in under $100

per kg of capacity. A table

below shows some recently

announced plants and their costs.

The size of a new plant matters a lot as well. The chart shows how recent large plants (9,000

to 10,000 tons) are substantially cheaper than smaller plants (3,000 tons) of the same

technology.

Cost Components of Manufacturing Polysilicon Once the plant gets built, the primary inputs to the plant are the electricity to create and

maintain such high temperatures, the metallurgical grade silicon feedstock, and labor and

other overhead. The combined need to have both highly skilled labor and low cost electricity

limits the number of places around the world that can serve as a manufacturing base for

polysilicon. The Pacifi c Northwest, Texas, Alabama in the US all have plants, while certain

places in Germany and Japan have also developed plants, though at higher electricity costs.

Norway is a good example of an emerging area with good characteristics for such production

with low electricity prices, though producers in China are attempting to use their low cost

labor and quick build times to create an advantage as well.

Impact of Price of Polysilicon Feedstock on Module EconomicsAssumed capital recovery plus operating cost for this means that the cost of silicon is at

least $0.60 to $0.75 per watt (based on a blended average cost of $70 to $85 per kg), or

Company Location Size (MTons) Cost ($mm) $/kgHemlock US 9000 500 $ 56 LDK China 5000 500 $ 100 Tokuyama Japan 3000 450 $ 150 SilPro Europe 3000 456 $ 152 DCC Korea 10000 778 $ 78 Timminco (Met Grade) Canada 14400 65 $ 5

Figure 4.7: Recently Annouced plants and their costs

Figure 4.6: Polysilicon Blended Contract Price



15 percent to 19 percent of the selling price of today’s solar modules (average of $3.65 per

watt).

If the industry wants to bring average selling prices for silicon modules down to $2 per watt

(a level widely considered to be economically transformative in global market) additional cost

reductions in silicon processing will be required. Our estimates suggest that the blended

average price for polysilicon must drop to under $45 per kg, usage has to drop to less than

8 grams per Watt, and other costs must fall in line as well. The chart shows today’s cost

breakdown for a fully loaded and profi table silicon module.

Figure 4.8: Polysilicon Costs and Profi t of Fully Loaded 15% Crystaline Module ($3.65/W)





5 PULLING AND WAFERING

Chunk or granular silicon needs to be shaped into wafers. There are various techniques to

do so, which were briefl y introduced in Section 2.4. However, in this section we will describe

these methods in detail.

The most common technique consists of transforming silicon into ingots or blocks, and

then slicing it into wafers. These techniques are Czochralski (CZ) and Float Zone (FZ) and

both produce monocrystalline (single crystal) silicon, which features a uniform alignment of

silicon molecules in three dimensions.

However, there are other techniques that grow wafers from the outset, such as ribbon growth

and thin sheets. These methods are less complicated, avoid slicing, and cost less, but the

productivity and purity levels are also lower. These methods produce multicrystalline silicon,

which is an aggregation of small silicon crystals.

5.1 Pulled Ingot vs. Cast Ingots vs. Ribbon/Sheet29

Silicon wafers can be made in different

ways. They can be sliced from a

pulled ingot or from a cast ingot (an

ingot block), or grown directly from

melted silicon into ribbon/ sheets (no

slicing is needed).

Pulled ingotsPulled ingots are obtained using

methods for growing crystals. The type

of silicon produced is mono or single

crystalline, as opposed to cast ingot or

ribbon / sheets, where multicrystalline

silicon is obtained.

Solar cells produced from single

crystalline wafers are more effi cient

(one to two percentage points more) compared with multicrystalline silicon wafers, but are

also more expensive to produce. They have an ordered crystal structure, with each atom

lying in a predetermined position with four electrons in the outer shell. Pairs of electrons

from neighboring atoms are shared, so each atom shares four bonds with the neighboring

atoms. A well-defi ned band structure is produced through this arrangement. This uniformity

is ideal for transferring electrons effi ciently through the material.

Methods to Obtain Pulled IngotsSingle crystalline substrates are typically differentiated by the process by which they are

made. Czochralski (CZ) and Float Zone (FZ) wafers are the most common silicon wafers.

Czochralski ProcessCzochralski (CZ) crystal growth involves the crystalline solidifi cation of atoms from a liquid

Figure 5.1: Single vs Multi Crystalline Silicon

Source: MEMC



phase at an interface. Highly pure silicon is melted

down in a crucible, usually made of quartz. Some

dopant atoms, such as boron or phosphorus, can be

added in precise amounts to dope silicon, which is

the process of adding impurities to change electrical

properties. A seed crystal mounted on a rod is

dipped into molten silicon.

The seed crystal’s rod is pulled upwards and rotated

simultaneously. By controlling the speed of rotation,

rate of pulling, and temperature, a large, cylindrical

ingot is extracted from the melt.

The walls of the crucible,

where the crystal is

grown, dissolve into the

melt. Hence, the silicon

obtained by this process

may contain oxygen

impurities. This can

have benefi cial effects

if properly treated.

However, these oxygen

impurities can react with

boron in an illuminated

environment, as in the

case of solar cells. An electrically active boron-oxygen complex can be formed, making the

wafers sensitive to high-temperature processing. In addition, oxygen impurities can reduce

the voltage, current, and effi ciency of the solar cell.

Float Zone ProcessThe Float Zone (FZ) process can be used to overcome the

problems in the CZ process. It produces purer crystals, which

are not contaminated by the crucible used in the CZ process.

In this process, a polysilicon rod is set atop a seed crystal, and

then lowered through an electromagnetic coil. The coil’s magnetic

fi eld induces an electric fi eld in the rod, heating and melting the

interface between the rod and the seed. A single crystal of silicon

is formed at the interface, growing upward as the coils are slowly

pulled.

FZ technology is by far the purest method to produce silicon, and

it does so with unique properties, as opposed to any other growth

Figure 5.2: Single Crystalline Silicon Structure

Source: EERF

Figure 5.3: CZ Diagram

Figure 5.4: FZ Process

Source: Topsil



technology. Silicon with

a resistance of over

100.000 Wcm can be

produced. In the case

of CZ silicon, it is diffi cult

to achieve a resistence

of over 1.000 Wcm.

Also, impurities, such

as oxygen, are much

lower by three orders of

magnitude in FZ silicon compared with CZ silicon. However, the level of crystalline defects is

higher and the process is more expensive to implement, especially for larger ingots. The FZ

process is mainly used to produce wafers for specialized applications, such as high-power

and high-voltage diodes.

In both pulled ingot methods, a cylindrical ingot is obtained. It is then sliced into six or eight

inch wafers, which are made into circular or square solar cells and mounted and wired

together in a weather-resistant package, creating a module.

Typical module effi ciencies are 14 percent to 19 percent. Effi ciency is expected to increase

to 16 percent to 22 percent by 2010 and, by 2015, it is estimated to be around 23 percent. 30

Cast IngotsAs opposed to pulled ingot methods, cast ingot

techniques produce multicrystalline silicon. These

methods are simpler and cheaper. However, the

product has lower quality, due to the presence of grain

boundaries. The grain boundaries reduce solar cell

performance by blocking carrier fl ows and providing

shunting paths. Additionally, the extra defect energy

levels reduce the overall minority carrier lifetime from

the material.

Researchers

are working

on ways to

minimize the effects of grain boundaries, as cast

ingot methods are far less expensive than pulled ingot

methods.

Methods to Obtain Cast IngotsThe most popular method to obtain multicrystalline

silicon involves a casting process. Molten silicon is cast

into a mold and solidifi ed into an ingot. The starting

F Z set-up F Z growth F inished F Z ingot F rozen particulatesF Z set-up F Z growth F inished F Z ingot F rozen particulates

Figure 5.5: FZ Process

Figure 5.6: Multi Crystalline Silicon Structure

Source: EERE

Figure 5.7: Crucible used in Casting techniques

Source: EERF



material can be lower-grade silicon, which is

cheaper than the higher-grade semiconductor

material required for single crystal production.

The mold is usually square, producing an ingot

that can be sliced in square cells, which fi t better

into a PV module with minimum wastage of

space.

The cooling rate is very important in this process,

since it determines the fi nal size of crystals and

distribution of impurities. In casting, melting

and solidifi cation are decoupled and higher

throughputs are possible. However, it is more expensive as more complex equipment and

processes are needed.

Silicon can also be melted and directionally solidifi ed in the same crucible (directional

solidifi cation). It is simpler than casting, as no melt pouring is needed. However, reaction

times are longer at high temperature between the melt and the crucible and so are

turnaround times.

Cast ingot methods are cheaper than pulled ingot techniques, as they require less skill,

manpower, and equipment sophistication. However, multicrystalline structures that contain

impurities and portions of the ingots’ surface need to be discarded. Hence, the lower cost of

these methods is at the expense of solar cell effi ciency.

Once the blocks of multicrystalline silicon are solidifi ed, they are cut into smaller bricks.

These bricks are then sliced into wafers, to be used in solar cells. Typical module effi ciencies

are 13 percent to 17 percent. By 2010, effi ciency is expected to reach 16 percent to 18

percent and by 2015, it is estimated to be over 20 percent.

Ribbon/SheetOther methods to produce multicrystalline silicon

go by the general name of Ribbon Growth. They

are cheaper than all the other processes as they

form the silicon directly into thin, usable wafers.

Hence, the silicon need not be sliced. However,

the fi nal product has some disadvantages, such

as low productivity, high-purity requirements, and

less quality.

EFG (Edge-defi ned Film-fed Growth) is a common

ribbon growth technique. The process consists of

two crystal seeds that grow and capture a sheet

of material between them, as they are pulled from a source of molten silicon. Although

there is not much waste material, the quality of the fi nal product is not as high as in pulled

Figure 5.8: Cast Ingot being cut in smaller blocks

Source: EERF

Figure 5.9: EFG Equipment for Ribbon Growth



ingot techniques. Currently, only one company

uses this technique: Schott Solar. The equipment

used is designed and manufactured by GT Solar

Incorporated.

Another patented technology is String Ribbon,

which is produced only by Evergreen Solar.31 Two

heat-resistant wires are pulled vertically through

a silicon melt, and the molten silicon spans and

solidifi es between the strings. It is a continuous,

silent, and clean process. The ribbon is then

cut into smaller pieces for further processing

into solar cells. String Ribbon yields over twice as many solar cells per pound of silicon as

conventional methods, leading the industry in material effi ciency. Moreover, String Ribbon

is one of the most environmentally-friendly processes in the business.

On an average,

typical Ribbon/

Sheet modules

have an effi ciency

of 14 percent to 16

percent. By 2010,

effi ciency is expected

to be between 16

percent to 18 percent

and by 2015, it is

estimated to be over 20 percent. The process shows almost the

same effi ciency as cast ingot multicrystalline silicon modules.

5.2 WaferingOnce silicon ingots or blocks are obtained, they need to be shaped

into wafers. The only processes where this step is not needed are

the ribbon and sheet techniques. In the case of the multicrystalline

silicon, large slabs are grown, which are then sliced into smaller

ingot blocks. In the case of single crystalline silicon, the top and

the bottom of the pulled ingot is removed using an inner diameter

saw. Sometimes, these ends are completely discarded; but in

other circumstances, they can be re-melted and used in future

processes. In this way, complete material loss is avoided. After this,

ingots are cut into smaller pieces, so as to optimize the slicing.

Then, ingots are ground into the correct shape and testing and

quality control procedures are performed on them. The ingots or

blocks are then mounted on the equipment, ready to be sliced.

Silicon wafers are sliced using both inner diameter saws and wire

Figure 5.10: String Ribbon machines and diagram

Source: Evergreen Solar

Cell Technology 2006 2010* 2015*Crystalline Silicon

Monocrytsalline Silicon 14-19 16-22 22-25Multicrystalline Silicon Cast Ingot 13-17 16-18 20+

Crystalline Based SiliconRibbon/Sheet Silicon 14-16 16-18 20+

Figure 5.11: PV Module Effi ciency Status and Forecast

* Paul Maycock estimates. PV Energy Systems

Figure 5.12: Silicon Tricks being sliced up into wafers

Source: EERF



type saws. Inner diameter saws can produce

only one wafer at a time. Wire saws can slice a

whole ingot at once, and they work with a fast

moving, ultra thin wire.

Immediately after the wafers are ready, they

are cleaned in a number of chemical baths to

remove residuals. After this, they go through a

series of refi ning steps to make them smooth

and of optimum thickness.

5.3 Capital Equipment Manufacturers32

There are hundreds of suppliers of PV manufacturing equipment. Some provide one piece

of equipment, while others provide equipment for assembly into a turn-key module line. The

profi les of the companies that provide key equipment for casting, pulling, and wafering are

detailed below.

GT Solar TechnologiesGT Solar (GTS) Technologies, based in Merrimack, New Hampshire, offers crystal pullers,

casting machines, advanced furnaces, ribbon pullers, and turnkey production lines. The

recent upsurge in demand for polysilicon ingot casting factories provides a large, growing

market for GTS’ manufacturing equipment. GTS is now producing turnkey lines for several

companies in Germany, China, and Taiwan. The company manufacturers its own equipment,

but sources wire saws from HCT Shaping Systems.

Standard Equipment from GTS includes:

DSS/HEM Furnace – For Multicrystalline Ingot Growth

Tabber/Stringer

GT-PFX100 Ribbon Flux Station

GT-PVSCAN 8000

GT-WEX 1000 Automated Wafer Etching Wet Bench

GT-CTX Automated Cell Testing

Global Photovoltaic Specialists (GPS)California-based GPS has been providing PV manufacturing equipment for 25 years.

They provide turn-key plants that include:

Ingot casting and wafering

Solar cell production

Module assembly and testing

GPS also designs and sells balance-of-systems electronics, including charge controllers,

lights, and water purifi ers.

Figure 5.13: Wire Saws

Source: EERF



Schmid GmbH & CompanyGermany-based Schmid manufactures wafer production systems (from polysilicon blocks)

and cells and module assembly lines. Schmid has operations in Taiwan, Hong Kong, Korea,

and Japan. Nearly all components of a Schmid system are produced in-house in one logistic

chain. The company’s automation, use of in-line diffusion, and metallization is impressive.

HCT Shaping Systems and Meyer & BurgerThese Swiss companies are world leaders in wire saw manufacturing. HCT has sold over

500 wire saws to the PV industry and was recently purchased by Applied Materials.

Crystal Growing Systems (CGS)33

Germany-based CGS and its predecessor, Leybold Systems,

have been developing and manufacturing pullers used in the

production of silicon crystals over several decades. The company

offers high levels of process automation and technology, working

in close cooperation with customers, such as Ersol, Siltronic

AG, Schott Solar, Asi, Xinri Energy, Shell Solar, SolarWorld, and

Shanghai Silicon.

The companies’ products include:

Crystal Puller Systems

Crystal Growth Systems

Float Zone Systems

KayexKayex is the leading producer of CZ silicon crystal growing

equipment, with over 1,000 pullers installed worldwide. Kayex is

advancing single crystal technology by introducing the KX100PV,

KX120PV, KX150PV for 150-200 mm wafers, and the low-cost

Flex-Feeder that can feed most fl owable polysilicon for top-off and

recharge. Its in-house hot zone modeling capability maximizes

results.

Kayex products include:

CG6000 (Silicon Crystal Growing Furnace, producing 150

mm ingots)

KX100PV (Silicon Crystal Growing Furnace, producing

150-200 mm ingots)


200 mm ingots)


200 mm ingots)

Crystal Removal Hoist

Flex Feeder

Figure 5.14: CGS Products

Source: CGS

Crystal Puller System

Float Zone Systems

Crystal Growth System



GigaMat34

Gigamat is a U.S.-based wafer

equipment manufacturer. The

company offers crystal growers,

edge grinders, polishers,

demount stations, and sorters.

5.4 Economics of Wafers for PV Cost Structure35

The manufacturing costs for producing PV modules are discussed in this section. The

present costs are provided for monocrystalline silicon and multicrystalline silicon plants. Costs

estimates refer to all manufacturing costs, such as material, labor, overhead, amortization of

assets at 14 percent per year, utilities, space, etc. Price results from adding 40 percent gross

product margin to cover research, engineering, marketing, and corporate management,

assuming a pre-tax profi t of 10 percent to 15 percent. These costs and prices assume new

100 MW plants that manufacture wafers, cells, and modules in a fully-integrated line at the

cell effi ciencies discussed in subsection above.

Silicon CostThe manufacturing of a one-watt monocrystalline or multicrystalline silicon cell consumes

between 9 and 10 grams of polycrystalline silicon, assuming the use of the latest sawing

technology and cell effi ciencies of approximately 15 percent, with 98 percent yield. If

semiconductor grade silicon at $50 per kg was used, a one-watt wafer module would

consume $0.45 to $0.50 worth of silicon.

Multicrystalline Manufacturing CostThe overwhelming majority of all new capacity being installed worldwide is cast ingot

multicrystalline silicon. We will focus on the manufacturing costs for a fully-integrated

plant that purchases pure silicon, casts its own ingots, slices the ingots to produce wafers,

produces cells, and assembles them into modules.

For comparison purposes, when analyzing 100 MW plants we found that both single and

multicrystalline silicon module manufacturing tend to fully burdened module costs of $1.50

to $1.75 per watt. The detailed manufacturing costs were obtained from public sources for

a multicrystalline silicon PV wafer, cell, and module manufacturing plant with a 100 MW

annual capacity for wafer and cell manufacturing. Module assembly data was available only

for a 30 MW plant, but we scaled it up accordingly.

The main steps in the production of a module are:

Ingot casting

Slicing the ingot into silicon slices

Formation of the cell—junction, metallization, anti-refl ection coating

Figure 5.15: GigaMat products

Source: GigaMat



Tabbing and stringing the cells

Packaging the cells into modules;

Testing

Ingot Preparation and Slicing (Wafer production)In order to form a multicrystalline silicon ingot, SG silicon is placed in a rectangular

parallelepiped crucible, usually of pure quartz. The large casting normally weighs 240 kg

and is then sawed into bricks about 150 cm by 150 cm by 60 cm. Multicrystalline silicon

producers use wire saws to slice the cast silicon ingots into bars and then wafers. The

leading supplier of wire saws is HCT Shaping Systems of Switzerland.

Ingot Casting and Slicing GT Solar Technologies (GTS)In the US, GTS manufactures ingot casting machines, and resells wire saws from HCT.

GTS provided us with their latest analysis of PV ingot casting and wafer manufacturing. Its

bottom line is that multicrystalline wafers producing cells at 15 percent effi ciency cost about

$1.00 per watt (at the module level) for a 100MW line. GTS concludes that, at 100MW per

year, the total cost of producing multicrystalline ingot and wafers, 200 microns thick with

200 microns of kerf and capable of 15 percent cell effi ciency, is about $0.87 per watt. The

lowest selling price per watt in late 2006 was $1.50 per watt, giving the slice producer a

substantial gross profi t margin. This margin captures the silicon recycled from the ingot

slabbing process, which reduces the silicon cost by $.10 per watt.

PV Cell ManufactureCompanies such as BP Solar, Kyocera, Photowatt, and Q-Cells manufacture multicrystalline

solar cells with high yield. Most make cells from 10 x 15 cm and 15 cm2 multicrystalline

wafers, either made in-house or purchased from Wacker or Scanwafer. BP Solar and

Kyocera perform in-house casting through a proprietary casting process. Kyocera performs

in-house casting under the terms of their Wacker license and Italsolar, Bayer, and Photowatt

use purchased casting equipment. Each process uses different grades of polysilicon and

every process has unique, proprietary cell processes and equipment. We cannot divulge

further details about manufacturing equipment processes because of nondisclosure

agreements. However, we do give a general description of the processing steps here. Most

analysts conclude that processing wafers into 15 percent effi cient multicrystalline cells with

95 percent yield can be accomplished for about $0.40-60 per watt added cost.

The key processing steps include:

Wafer cleaning

Spray-on doping

Junction diffusion

Antirefl ection coating deposition (either before or after metallization)

Screen printing of metallization pattern

Deposition of back-side metal

Plasma etch cell edges

These costs do not include the cost of engineering cell process development and production.



Engineering costs can be estimated to consist of at least two salaries at $150,000 each

(including overheads), for an additional $300,000 per year or $0.03 per watt. Three US

manufacturers of monocrystalline and multicrystalline silicon cells have attained cell

manufacture costs of $.40 per watt. These companies have experienced production lines,

now on their third generation of automated equipment.

They use proprietary processes and achieve higher effi ciency/yield results than we assume

here. For new entrants, it is reasonable to assume that a new line has higher costs, lower

effi ciencies, lower yields, higher engineering costs, etc. In the absence of an advanced

technical partner, such companies can reasonably expect costs of $0.50 per watt.

Module Production: Key Operations and CostsThe fi nal step in PV manufacturing is to assemble the cells into a series/parallel connection

to obtain the voltage and power level desired. This string of cells is packaged for long-term

power output (over 20 years). The following steps are required for the production of modules

from cells:

Cell tabbing and stringing

Module assembly and lamination

Module testing

Cell Tabbing and StringingMetallic conducting foils (tabs) are soldered or welded onto the leads on top of the cells. The

cells are then interconnected into a 60-cell string by soldering or welding the tabs from the

top surface of one cell to the back conductor of the next. This operation is called stringing.

The stringed set of cells will produce about 220 W at 30 volts DC. Formerly, the soldering

for stringing was done by hand. Today’s manufacturers use in-house tabbing and stringing

machines to perform the task. There are several commercial manufacturers of tabbing and

stringing equipment, such as Spire Corporation, GTS, and NPC. It is especially important

that this operation is performed at 98 percent yield. GTS provided us with the latest data on

a 30 MW/year module line that processes cells from wafers 200 microns thick.

Module Assembly and LaminationThe 60-cell string, arrayed side by side to ‘fi ll’ a rectangular area, is ready to be packaged.

A typical package consists of:

A sheet of tempered glass

A layer of ethyl vinyl acetate (EVA)

The cell string

A second layer of EVA

A back cover of aluminum foil, Tedlar®, or glass

This entire sandwich is then placed in a laminator that heats the module, in turn melting the

EVA and laminating the glass, cells, and back cover into a hermetic package that protects the

cells and can survive weather, UV, hail, moisture, etc. for 20 years or more. Most laminators

also pull a light vacuum to eliminate any entrapped air or water. Most manufacturers have

designed, built, and expanded their own laminators.



Module TestingSeveral kinds of equipment are available for testing modules. According to available data,

Spire has the most number of testers in service. The tester automatically plots an I/V or

current voltage curve for each module.

Monocrystalline Manufacturing CostThe costs of manufacturing PV monocrystalline modules are similar to the multicrystalline

silicon costs, with two important exceptions. First, the crystal is formed by pulling a

monocrystalline circular rod from the molten silicon, the CZ process. This process is slower,

uses more energy, and costs about 20 more per yielded watt than multicrystalline silicon.

Second, the cells produced by CZ pulled silicon are on average about 15 percent more

effi cient than multicrystalline cells. We estimate that a company with a new, fully automated

100 MW plant and a purchase agreement for multicrystalline silicon at $50 per kg would

incur 2006 manufacturing costs of about $2.50 per watt. With an assumed 40 percent gross

profi t margin, a profi table selling price would be about $4.16 per watt. With a 30 percent

margin the profi table price would be $3.75 per peak watt. A standard production line begins

with raw silicon and makes silicon ingots, wafers, cells, and modules on ownership and in

close proximity. Lines such as these will be fully operational in 2008. We know that eight

such lines have been ordered from key equipment suppliers.

Figure 5.16 compares the basic costs differences between producing monocrystalline

silicon and multicrystalline silicon modules, again assuming vertically-integrated processes

from purchased silicon to completed modules. Only one monocrystalline plant—the Shell

solar plant in the US, now owned by Germany’s Solar World—makes silicon ingots, wafers,

and cells and modules. Two multicrystalline silicon plants are fully-integrated from ingot

production to module production: BP Solar’s plant in Frederick, MD and the Kyocera plant

in Japan. The silicon sheet/ribbon fully-integrated plants are Schott Solar and Evergreen

Solar, both based in Massachusetts, U.S. (although Evergreen has a production venture,

EverQ, in Germany).

Silicon Ribbon or Sheet Manufacturing CostAnother process to create multicrystalline ingots, which reduces the inherent ineffi ciencies

Cost Element Monocrystalline Silicon* Multicrystalline Silicon* Silicon ribbon/sheet*Wafer Cost $1.00 - 1.20 $0.80 - 1.00 $0.50 - $0.60Cell Cost $0.40 - 0.50 $0.50 - $0.60 $0.60 - 0.70

Module Cost $00.40 - $0.50 $0.50 - $0.60 $0.50Total Cost $1.80 - 2.20 $1.80 - 2.20 $1.60 - 1.70

Figure 5.16: Comparison of Monocrystalline Silicon Module, Multicrystalline, and Ribbon Sheet Mfg. Cost

* Monocrystalline silicon wafers are 15cm x 15cm, wafer plus kerf 500 microns, cells are 17.5%. Silicon usage is about 12 grams per watt at $60/kilogram

** Multicrystalline silicon wafers are 15 cm x 15cm, wafer thickness plus kerf 400 microns, cells are 15%. Silicon usage is about 10-11 grams per watt.*** Silicon ribbon and sheet. No slicing and continuous growth of wafers, with 15% cells silicon usage of 6-8 grams per watt.



and material loss of the traditional sawn ingot process, has been developed. In this process,

a thin sheet or ribbon of silicon is pulled from a molten bath of pure silicon slowly, so that it

crystallizes as it is withdrawn. This slow pulling procedure eliminates sawing and kerf loss,

and results in square or rectangular wafers. Cells made from silicon ribbon comprise less

than 5 percent of today’s market. Throughput and cell quality improvements have resulted

in ribbon material costs that are much lower than sliced single and multicrystalline cells.

Cells now in production have effi ciencies of 13 percent to 15 percent.

Increasing the “pulling” rate by using thinner material can produce a two-fold reduction in

the cost of wafers over sliced crystal product. Ribbons 0.010-inch, or 250 microns, thick,

with 80 percent overall device yield at 14 percent effi ciency, will enjoy a signifi cant cost

advantage over sliced single and polysilicon wafers that require 0.020-0.030 inches (500

microns wafer thickness plus kerf) of silicon per wafer. These results could reduce the cost

of a six-inch square (150 microns2) wafer 200 percent over slicing. Such a silicon-effi cient

manufacturing process could lead to wafers costing $0.75/watt, compared to $1.50/watt for

slices from monocrystalline or multicrystalline silicon.



6 POLYSILICON PROJECTIONS AND FORECAST MODEL

THROUGH 2012The PV industry has grown an average of 40 percent per year over the last decade. In 2007,

annual cell production grew more than 50 percent over 2006. This trend has sustained for

nearly a decade with average annual growth in PV demand of 45 percent over the last 10

years. We estimate that in 2007, the PV industry required roughly 30,000 MT of polysilicon,

while the semiconductor industry used around 22,000 MT before recycling 22 percent of

its scrap back into the PV sector.

The demand for polysilicon feedstocks has been directionally similar, but it has not grown as

quickly as the demand for PV. The reasons include increasing cell and module effi ciency

(reducing grams/ Watt), thinner wafers (same effect), and increasing penetration of thin fi lm

PV that does not use as much polysilicon. The result is that growth of polysilicon used in PV

has been about 32 percent per year.

Going forward, we believe that the polysilicon demand from PV producers will grow annually

at a faster rate (40 percent to 54 percent) than the polysilicon demand from semiconductors

(12 percent).

In this section we present a forecast model of PV production growth to 2012.

6.1 Prometheus Institute Research MethodologyIn an effort to give a realistic idea of future capacity we evaluate each capacity expansion

plan based on four criteria.

1. Is the company reputable in the solar silicon space?

2. Has a technology been chosen and provided?

3. Is a funding source identifi ed?

4. Has a timeline and adequate technical capacity for project construction been

provided?

Projects that meet these criteria were considered likely to occur and thus were considered

for building the projected capacity. On the other hand, potential capacity includes all proj-

ects, including those that do not meet these criteria and thus are unlikely to occur.

6.2 Polysilicon Capacity Projections to 2012By 2012 the total silicon supply is expected to grow to over 170,000 MT. The top two

companies, Hemlock and Wacker, will maintain their position, followed by REC and

MEMC.

All companies that currently produce polysilicon are expanding capacity to varying degrees.

For example, Sumitomo (Osaka Titanium) has the most modest capacity expansion plan,

whereas Hemlock anticipates nearly 25,990 MT of total production over the next fi ve years

up from 10,005 MT of production in 2007.

Our projected capacity estimates, according to the criteria outlined above, are presented as

follows:



Figure 6.1: Company-specifi c Polysilicon Capacity Forecasts Through 2012

CapacityCurrent Producers 2005 2006 2007 2008E 2009E 2010E 2011E 2012EHemlock US 7,700 10,000 10,010 14,630 19,000 23,000 27,500 36,000 Wacker Germany 5,500 6,500 10,000 14,500 14,500 22,500 22,500 22,500 Tokuyama JP 5,300 5,400 5,400 5,600 8,200 8,200 8,200 8,200 MEMC -Merano (Siemens’s) IT 1,100 1,100 1,600 2,000 2,875 3,000 3,250 3,750 MEMC -Pasadena (FBR) US 2,300 2,700 4,400 6,000 8,625 9,000 9,750 11,250

Dust and recycling 400 600 700 800 900 900 900 900 MEMC US/ IT 3,800 4,400 6,700 8,800 12,400 12,900 13,900 15,900 REC Group (AsiMi) US 2,800 3,300 3,500 4,500 4,500 4,500 4,500 4,500 REC - SG Silicon US 2,200 2,200 2,200 2,300 2,400 2,500 2,500 2,500

Fluidized Bed US - - - 500 6,500 6,500 6,500 6,500 Internal Expansion US 300 200 100 6,000 6,500 6,500

REC US 5,000 5,500 6,000 7,500 13,500 19,500 20,000 20,000 Mitsubishi -M-Poly JP 1,600 1,600 1,800 1,800 2,029 2,232 2,456 2,702 Mitsubishi -MIPSA JP 1,250 1,550 1,500 1,500 1,661 1,827 2,009 2,210

Mitsubishi JP 2,850 3,150 3,300 3,300 3,690 4,059 4,465 4,912 Sumitomo JP 800 900 1,300 1,400 1,400 1,400 1,400 1,400 Current Producers Total: 30,950 35,850 42,710 55,730 72,690 91,559 97,965 108,912

New Entrants - Current Technology 2005 2006 2007 2008E 2009E 2010E 2011E 2012ESilicium De Provence (SilPro) FR 4,000 4,000 4,000 DC Chemical (Siemens) SKorea - 5,000 15,000 15,000 15,000 15,000 Isofoton / Endesa JV (Siemens) ES 2,500 2,500 2,500 2,500 Hoku Scientifi c (Siemens) US 100 400 750 3,000 M. Setek (Siemens) JP 200 400 4,200 5,800 10,000 10,000 10,000 Scheuten SolarWorld Germany 500 1,000 1,000 1,000 LDK CH 6,000 15,000 15,000 15,000 15,000 Emei CH 220 370 500 1,300 4,800 4,800 4,800 CSG CH 300 1,500 1,500 1,500 Luoyang China Silicon CH 400 1,000 1,000 2,000 3,000 3,000 3,000 Sichuan Xinguang CH 200 1,260 1,260 1,260 1,260 1,260 Other China CH - 260 2,224 5,280 7,390 7,870 7,870 Nitol RU 1,200 3,600 3,600 3,600 3,600 Crystall/ Russia and Former Soviet Union RU 60 660 1,200 5,200 12,700 12,700 17,200 New Entrants - Current Technology - 880 2,890 22,584 57,840 82,150 82,980 89,730

New Entrants - Alternative Technology 2005 2006 2007 2008E 2009E 2010E 2011E 2012EElkem Norway - - - 5,000 5,000 15,000 15,000 15,000 Joint Solar Silicon GmbH & Co KG (JSSI) Germany - - - 850 1,000 1,000 1,000 1,000

JFE Steel Japan - - - - 100 200 400 400 SolarValue AG Germany - - - - 4,400 5,300 5,300 5,300 Dow Corning Corp Brazil - 1,000 3,000 3,000 6,500 10,000 15,000 15,000 Becancour Silicon (BSI) Canada - - 300 3,600 14,400 14,400 14,400 14,400 AE Polysilicon US - - - 1,500 1,500 12,000 12,000 12,000 New Entrants - Alternative Technology - 1,000 3,300 13,950 32,900 57,900 63,100 63,100

Total Capacity and Production Estimates:Current Producers 35,850 42,710 55,730 72,690 91,559 97,965 108,912 New Entrants - Current Technology 880 2,890 22,584 57,840 82,150 82,980 89,730 New Entrants - Alternative Technology 1,000 3,300 13,950 32,900 57,900 63,100 63,100 plus: 60/50/40% of likely new entrants and recycling 37,730 48,900 77,650 118,060 147,579 156,397 170,044

Total Potential Capacity 37,730 48,900 92,264 163,430 231,609 244,045 261,742



In our projections, we have distinguished between companies that have solid reputations

in the industry and clear production goals, and those fi rms that are less well-known with

unclear or questionable plans. We are aware that there may be new announcements from

existing producers as well as new entrants. But we also expect that not all of the announced

expansion plans will be brought to completion on time or indeed at all. The total potential

capacity, if all reasonable plans were to be realized would rise from 48,900 MT in 2007 to

over 261,000 MT in 2012, an increase of nearly 5 times.

For this part of the analysis,

we have included only

companies that meet

our criteria for adequate

resources and technology.

The totals are added up

below, and then a discount

factor is applied to the

new entrants that starts at

60 percent in 2008 and

declines to 40 percent

through 2012. This

discount effect is provided

to adjust the analysis for

technological problems

that occur (especially in the

alternative technologies), the need for substantial new funding to complete initial and follow-

on plants (which is not always available in the volumes desired), and changing prioroteos of

producers and their owners in the face of a rapidly increasing global supply of polysilicon.

By 2010 through 2012, our projections for new capacity additions slow dramatically as

all of these factors, including a surge of thin fi lm competition, all combine to a period of

ample supply and limited new plants until the available capacityis absorbed. We believe

that new producers are going to fi nd it very diffi cult to compete in such an environment, and

then existing producers will be limited in their ability to fund expansions until demand for

polysilicon increases to meet the available supply.

6.3 Polysilicon Production Projections to 2012Converting projected capacity to projected production available in a given year requires

understanding the construction and ramp process for these plants. The annual estimates

produced throughout include not only partial year results, but ramp up periods as appropriate.

We believe that additional positive news (such as marginal productivity improvements) and

negative news (construction delays and reductions of new plant sizes) will likely occur, but

these projections refl ect our best estimates of future production at this time.

Figure 6.2: Cumulative Capacity 2006-2012



Figure 6.3: Company-specifi c Polysilicon Production Forecasts Through 2012

ProductionCurrent Producers 2006 2007 2008E 2009E 2010E 2011E 2012EHemlock US 8,850 10,005 12,320 16,815 21,000 25,250 31,750 Wacker Germany 6,000 6,500 13,375 14,500 18,500 22,500 22,500 Tokuyama JP 5,350 5,400 5,500 6,900 8,200 8,200 8,200

MEMC -Merano (Siemens’s) IT 1,100 1,350 1,800 2,438 2,938 3,125 3,500 MEMC -Pasadena (FBR) US 2,500 3,125 4,800 7,313 8,813 9,375 10,500

Dust and recycling 500 650 750 850 900 900 900 MEMC US/ IT 4,100 5,125 7,350 10,600 12,650 13,400 14,900

REC Group (AsiMi) US 3,050 3,433 4,167 4,500 4,500 4,500 4,500 REC - SG Silicon US 2,200 2,200 2,250 2,350 2,450 2,500 2,500

Fluidized Bed US - - 250 3,500 6,500 6,500 6,500 Internal Expansion US 150 4,525 6,375 6,500

REC US 5,250 5,633 6,667 10,350 13,450 13,500 13,500

Mitsubishi -M-Poly JP 1,600 1,700 1,800 1,915 2,131 2,344 2,579 Mitsubishi -MIPSA JP 1,400 1,525 1,500 1,580 1,744 1,918 2,110

Mitsubishi JP 3,000 3,225 3,300 3,495 3,874 4,262 4,689 Sumitomo JP 850 1,100 1,350 1,400 1,400 1,400 1,400 Current Producers Total: 33,400 36,988 49,862 64,060 79,074 88,512 96,939

New Entrants - Current Technology 2006 2007 2008E 2009E 2010E 2011E 2012ESilicium De Provence (SilPro) FR - - - - 2,000 4,000 4,000 DC Chemical (Siemens) SKorea - - 2,500 7,000 15,000 15,000 15,000 Isofoton / Endesa JV (Siemens) ES - - - 2,500 2,500 2,500 2,500 Hoku Scientifi c (Siemens) US - - - 50 250 575 1,875 M. Setek (Siemens) JP 100 300 1,350 4,600 6,850 10,000 10,000 Scheuten SolarWorld Germany - - - 500 750 1,000 1,000 LDK CH - - 3,000 10,500 15,000 15,000 15,000 Emei CH 110 295 435 900 3,050 4,800 4,800 CSG CH - - - 150 900 1,500 1,500 Luoyang China Silicon CH 200 700 1,000 1,500 2,500 3,000 3,000 Sichuan Xinguang CH - 100 730 1,260 1,260 1,260 1,260 Other China CH - 130 1,242 3,752 6,335 7,630 7,870 Nitol RU - - 300 2,400 3,600 3,600 3,600 Crystall/ Russia and Former Soviet Union RU 30 360 930 3,200 8,950 12,700 14,700 New Entrants - Current Technology 440 1,885 11,487 38,312 68,945 82,565 86,105

New Entrants - Alternative Technology 2006 2007 2008E 2009E 2010E 2011E 2012EElkem Norway - - 2,500 5,000 10,000 15,000 15,000 Joint Solar Silicon GmbH & Co KG (JSSI) Germany - - 425 925 1,000 1,000 1,000 JFE Steel Japan - - - 50 150 300 400 SolarValue AG Germany - - - 2,200 4,850 5,300 5,300 Dow Corning Corp Brazil 500 2,000 3,000 4,750 8,250 12,500 15,000 Becancour Silicon (BSI) Canada - 150 1,950 9,000 14,400 14,400 14,400 AE Polysilicon US - - 750 1,500 6,750 12,000 12,000 New Entrants - Alternative Technology 500 2,150 8,625 23,425 45,400 60,500 63,100

Total Capacity and Production Estimates: 2006 2007 2008E 2009E 2010E 2011E 2012E

Current Producers 33,400 36,988 49,862 64,060 79,074 88,512 96,939 New Entrants - Current Technology 440 1,885 11,487 38,312 68,945 82,565 86,105 New Entrants - Alternative Technology 500 2,150 8,625 23,425 45,400 60,500 63,100 plus: 60/50/40% of likely new entrants and recycling 34,340 41,023 61,929 94,928 124,812 145,738 156,621



In 2007, Hemlock and Wacker were the two largest polysilicon producers and each one

accounted for approximately 20 percent of the global supply. Based on our estimates, by

2012 the seven largest companies producing silicon will lose market share to new entrants.

Chinese companies are expected to grow collectively from 4 percent in 2007 to 8 percent

market share in 2012.

Additionally, the most dramatic change in 2012 will refl ect the increase in market share for

the “Other” category. This category refers to all non-Chinese new entrants, with both current

or alternative technology. This category, which accounted for 9 percent in 2007, is expected

to reach 28 percent by 2012.

Chinese projects could swing totals36

China is expected to become one of the top worldwide polysilicon producers driven by new

projects, as well as already on-going projects. Even though this large-scale capacity creation

is being undertaken, the expansion is going much slower than expected. While Chinese

producers have announced capacity plans of around 22,400 MT in 2008, we estimate

that actual output could be much less than that (around 4,400 MT). According to a study

conducted by CLSA’s China Reality Research (CRR), the slowdown in polysilicon capacity

expansion is mainly due to

the underestimation of

the complexities of the

technology, design, trial

and production processes.

Other growth constraints

mentioned by CRR have

to do with safety and

environmental issues.

Figure 6.4: Polysilicon Market Share by producer, 2007-2012

Year Potential Capacity (MT) Projected Capacity (MT) 2008e 22,380 4,394 2009e 48,760 10,056 2010e 65,010 13,180 2011e 67,410 13,372 2012e 67,410 13,372

Figure 6.5: Chinese Projects – Capacity, 2008-2012



The chart below shows the additonal producers – most of them from China – that could

substantially add to global polysilicon production. Chinese production could exceed 67,000

MT in 2012 if these and the ones included in the forecast above were all realized. That

represents over 25 percent of the total potential production in that year.

ADDENDAProduction

Chinese Projects 2006 2007 2008E 2009E 2010E 2011E 2012EAsia Silicon Qinghai - Xining City CH 1,000 3,000 5,000 6,000 6,000

Jiangsu Shunda - Jiangsu Yangzhou City CH 300 825 1,275 1,500 1,500

Jiangsu Zhongneng - Jiangsu Xuzhou City CH - 300 825 1,275 1,500 1,500 Aixin Silicon - Yunnan Qujin City CH 60 360 600 1,800 3,000 Tongwei and Juxing Sichuan - Leshan City CH 500 4,000 8,500 10,000 10,000 Shanxi Tianhong Silicon - Shanxi Xianyang City CH 1,875 3,750 3,750 Dalu Polysilicon - Inner Mongolia Huhhot CH 1,250 2,500 2,500 2,500 Zhongjing Huaye Solar Polysilicon - Inner Mongolia Baotou CH 200 600 1,000 1,200 1,200

Shenzhou Silicon - Inner Mongolia CH 750 1,500 1,500 1,500 1,500 Jinhua Smelting Liaoning - Linghai CH 250 500 500 Jiangsu Daquan Group - Chongging Wanzhou CH 750 1,500 1,500 1,500 1,500 Sichuan Xinguang Silicon Science and Technology Co., Ltd CH 650 1,300 1,300 1,300 1,300 1,300

JPID (Jiangsu Photovoltaic Industry Development Co) CH 1,050 3,600 5,100 5,100 5,100

Chinese Projects Total - 650 6,210 18,760 31,675 38,150 39,350

New ProducersJaco SolarSi CH 1,000 2,000 2,000 2,000 2,000 Xián Lijing Electronic Technology and Co. CH 250 500 500 500 500 Topsil Semiconductor Materials A/S DenmarkYingli Solar CHKCC Corp. Korea 750 2,250 3,000 Crystalox Solar Germany 450 1,125 1,575 1,800 Trina Solar CHMosel - Vitelic TaiwanSolartech Energy TaiwanNippon Steel Materials JP 240 480 480 480 480 Global PV Specialists US 1,500 2,000 2,000 2,000 2,000 GiraSolar USPrime Solar Australia 2,250 6,750 9,000 9,000 ARISE Canada 25 1,025 2,000 2,000

New Producers Total - - 2,990 7,705 14,630 19,805 20,780

Figure 6.6: Potential Capacity for Emerging Polysilicon Producers



While the 2008 Olympics at Beijing are expected to intensify central and local governments’

attention, we believe that a global excess supply of modules starting in 2009 will cause

the Chinese government to begin a dramatic domestic support of PV and polysilicon

producers. With Chinese cell and module producers exporting more than 95 percent of their

production by 2010, a global supply glut could have very serious consequences for Chinese

manufacturers without such support. We believe that the Chinese government sees the PV

industry as a key sector and will work to mitigate the damage in such a situation.

6.4 Changing Market Dynamics for Polysilicon ProducersThe combination of new polysilicon production coming online in 2008 and ramping up

substantially through 2010, coupled with ever-declining polysilicon grams needed to

produce a Watt of PV is set to signifi cantly add to global cell and module supply in the next

few years. The table below shows our estimates of the total polysilicon production with

adjustments including:

Excess Production – In today’s world of super-high polysilicon prices (with spot prices

reaching $400 per kilogram), many companies are running their production plants at or

beyond their nameplate capacity. This is achieved through marginal process improvements,

faster cycle times that has a marginal (but manageable) impact on quality and impurities,

and reduced downtime. While these volumes have been helpful and profi table in meeting

short-term surges in demand, they are not sustainable over the long term. We expect that

they will be phased out (or absorbed into nameplate capacity) by 2011.

Semiconductor Demand – This is the amount of the virgin polysilicon material that is sent

originally to the semiconductor industry. These fi gures are adapted from industry trade

associations and conversations with major vendors and customers of the material.

Recycling – This is the scraps and excess polysilicon that comes from the semiconductor

industry to the PV industry and historically been a meaningful supply for PV producers. With

rising prices for scrap and new technologies for converting it, the percentage of semi-poly

that has been recaptured in this way has been rising and is now some 22 percent of the

material that is originally sold to the semiconductor customers.

Inventory Effects – From 2003 to 2006, many traditional polysilicon manufacturers had

excess inventories that were available to the PV industry. In 2007, many second-tier

supplies and additional scrap in warehouses were also discovered and put to use, but not

without some quality issues for the wafer and cell manufacturers. (For example, LDK had

a meaningful issue related to inventory valuation and useability of these scrap materials

in 2007.) With global supplies of these secondary inventories depleted and global supply

chains stretched very thin, some rebuilding of channel inventory will need to occur in the

next few years. This should soak up some amount of the new supply, but by the end of

2009, we expect that ample channel inventory will be achieved, and downward pressures

on polysilicon prices will be substantial.



The forecast then converts the remaining polysilicon available for the PV industry into cells

using grams per Watt estimate. These cells are then converted into modules to show the

total crystalline module availability. This is added to the projected thin fi lm module capacity

from our studies elsewhere on the emerging thin-fi lm PV supply chain. What results is a

picture of the total market for PV modules through 2012 that sees the increases in module

supply to nearly 20 GW globally by 2012. This is compared to the 3 .1 GW of modules

produced globally by 2012.

While we forecast global demand, costs and prices in other reports, it is suffi cient to say that

we believe the global supply will exceed global demand by a wide enough margin in the

2009 to 2012 timeframe to push down market prices and producer margins throughout the

PV supply chain.

Figure 6.7: Total Polysilicon Production Estimate through 2012

Total Capacity and Production Estimates: 2006 2007 2008E 2009E 2010E 2011E 2012ECurrent Producers 33,400 36,988 49,862 64,060 79,074 88,512 96,939 New Entrants – Current Technology 440 1,885 11,487 38,312 68,945 82,565 86,105 New Entrants – Alternative Technology 500 2,150 8,625 23,425 45,400 60,500 63,100

Plus: 60/50/40% of likely new entrants and recycling 34,340 41,023 61,929 94,928 124,812 145,738 156,621

Plus: Excess Production 2,338 3,699 3,740 3,203 1,977 - - Less: Semiconductor Demand (21,500) (22,150) (24,808) (27,785) (31,119) (34,853) (39,036)Plus: Recycling (22% of IC) 4,730 4,873 5,458 6,113 6,846 7,668 8,588 Plus: Inventory effects 3,258 2,625 (234) (5,440) (2,958) (1,674) (871)

Poly for Solar 23,166 30,070 46,084 71,019 99,558 116,878 125,302 Grams / Watt 10.0 9.1 8.7 8.2 7.8 7.6 7.5

MWP Equivalent supply (Cell) 2,317 3,304 5,297 8,661 12,764 15,379 16,707

Crystalline Silicon Module Equivalent (82%) 1,900 2,710 4,344 7,102 10,466 12,611 13,700Total Thin Film Modules 196 434 1.056 2,168 3,375 4,182 5,472Total Silicon and Thin Film Modules 2,096 3,144 5,399 9,269 13,842 16,792 19,172Growth in Available Supply 50% 72% 72% 49% 21% 14%Percent Thin Film Production 9.4% 13.8% 19.6% 23.4% 24.4% 24.9% 28.5%



7 UNWINDING THE POLYSILICON CONSTRAINT

The PV industry’s dependence on silicon has made it extremely vulnerable to supply

shortages. Before 2000, the industry could survive on the small amount of feedstock not

consumed by the semiconductor industry. At present, however, PV silicon demand is on the

verge of surpassing IC silicon demand. In this section we provide our assessment of what

the feedstock constraint means for the PV industry in terms of material prices, as well as the

industry’s fundamental structure.

7.1 Projected Polysilicon Prices and MarginsAt the end of the 1990s, the polysilicon industry felt an oversupply, with capacity utilization

falling from 90 percent to around 80 percent. At that time, the price of polysilicon was $30 per

kg. In 2001, prices fell under $30 and many polysilicon makers had to shut down factories

with capacity utilization below 62 percent. But in the last three years, PV companies have

been paying increasingly higher prices as demand has exceeded supply from traditional

channels of the IC industry’s off-spec material. Since then, utilization has soared to around

100 percent now. Contract polysilicon prices have reached close to $70 per kg, while spot

market prices oscilate between $350 and $395 per kg.37

The majority of polysilicon supply is sold under contracts and only a small percentage

available on the spot market. The fi gure below shows polysilicon contract prices from 2005

to 2012E, according to a UBS study published in December 2007. In 2008, the blended

contract price is expected to reach $70 per kg from $67 per kg in 2007, meaning a 5 percent

y/y growth. The raising tendency should continue through 2010, reaching a maximum of

$72 per kg in 2009 and will then decline, once announced plans for expanding capacity

and new entrants create a modest oversupply. Total capacity is expected to be 147,579 MT

in 2010 from 48,900 MT in 2007. The capacity expected by 2012 is 170,044 MT. Total

capacity is divided between established polysilicon companies (curent producers), new

entrants with current technology which incldude new Chinese projects, and new entrants

with alternative technology.

Spot prices are less relevant than contract prices in MT volume. However, demand for

spot polysilicon has accelerated, as some PV producers can not secure future contracts for

various reasons (mostly because of upfront cash requirements). Other PV producers buy

in the spot market to meet additional capacity requirement, not covered by their contract

2007 2008e 2009e 2010e 2011e 2012eCurrent Producers 42,710 55,730 72,690 91,559 97,965 108,912New Entrants – Current Technology 2,890 9,034 23,136 32,860 33,192 35,892New Entrants – Alternative Technology 3,300 5,580 13,160 23,1660 25,240 25,240Total Capacity (projected) 48,900 70,344 109,986 147,579 156,397 170,044

Figure 7.1: Polysilicon Projected Capacity

2005 2006 2007e 2008e 2009e 2010e 2011e 2012ePolysilicon $ / kg $60 $64 $67 $70 $72 $67 $60 $58YOY Change 7% +5% +5% +3% -7% -10% -3%

Figure 7.2: Polysilicon Blended Contract Price ($/kg)



supply. As there are very few suppliers in this market, the growing demand is causing a

signifi cant rise in spot prices, until the 2Q08. As more solar companies sign long-term

contracts and more polysilicon manufacturers sell excess capacity on the spot market, the

polysilicon shortage is expected to ease and therefore prices to decline.

It is also relevant to analyze the cost and margins side, in order to get a broader picture

on the industry. Assuming that the Siemens process is used, as it is the most common

technique in the market, the polysilicon cost per kg is expected to decrease from $38 per

kg to $34 per kg in 2012.

The projected gross margins (including raw materials, utilities, labor, waste treatment, and

depreciation charges) are expected to peak to 49 percent in 2009 due to increases in

prices per kg, but will then soften to 41 percent to 47 percent in the following years as prices

decline sharper than costs decrease. With increasing prices up to 2009 and declining costs

through 2012, there is a greater incentive for additional investment in the industry. The

expected capacity expansion of new entrants can affect gross margins, forcing them to go

down as more competition becomes evident. However, we think established suppliers will

be well protected against a margin collapse, even by 2010 or 2011, when an oversupply

is expected. New entrants will also face other barriers of entry such as material quality,

production and setup costs, as well as reliability.

7.2 Changing Industry StructureSeveral trends have become apparent as the industry reacts to the polysilicon shortage.

First, the industry is solidifying by increasingly entering into joint ventures and long-term

contracts and by building in-house silicon processing capabilities to vertically integrate.

However, high prices are attracting new entrants. Even though many are attempting to enter

the industry, there are important barriers to entry.

Barriers to EntryThe following are the key barriers to entry in the polysilicon market, based on a study

prepared by Fabian Wenner, one of UBS’ European solar team members.

1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07E 1Q08E 2Q08E 3Q08E 4Q08ESpot Price $208 $235 $245 $266 $285 $290 $325 $350 $395 $325 $300 $275Q/Q 13% 4% 9% 7% 2% 12% 8% 13% -18% -8% -8%

Figure 7.3: Polysilicon Spot Price ($/kg)

Source: UBS

2007E 2008E 2009E 2010E 2011E 2012EPolysilicon cost $/kg (Siemens) $38 $38 $37 $36 $35 $34Polysilicon Prices $/kg $67 $70 $72 $67 $60 $58Polysilicon Gross Margin % 43% 46% 49% 47% 42% 41%

Figure 7.4: Polysilicon Costs, Prices and Manufacturer’s Gross Margin

Source: UBS



Prepayments to established polysilicon suppliers typically amount to 30 percent of the total

contract revenue. Therefore, new entrants will have to price polysilicon at least 30 percent

below current contract price, to lure existing clients away from these established suppliers.

Lower production costs of established polysilicon companies. Suppliers, including MEMC,

REC, and Wacker, already operate beyond the 10th generation of polysilicon reactor

equipment and have well-integrated production cycles. The cost to produce polysilicon is

around $30 to $33 per kg, with a potential 20 percent reduction over the next three years.

New entrants’ costs are likely to remain 40 percent higher, and therefore margins will also

remain lower.

Ramp-up speed and reliability. Due to process experience, established suppliers will require

less capex and time to set up new capacity. The average capex for 1,000 MT per year of

polysilicon in brownfi eld amounts to $85 million in investments and requires 1.5 to 2 years

to bring on line. New entrants will need over 2.5 years and around $200 million of capex.

Bearing in mind the current constraints in credit markets, we are being cautious when

estimating the projected capacity of new entrants.

Increased Effi ciency of Silicon Use and Energy ConversionThe industry is also reacting to the silicon supply constraint by making strides in reducing

silicon waste through increasing recycling efforts, improving the conversion effi ciencies of

cells, slicing thinner wafers, and devising innovative processing methods.

Nearly all PV cell producers, such as ErSol Solar, Evergreen Solar, Q-Cells, and SunPower,

are improving their silicon requirements per watt. One way to accomplish this is by producing

thinner wafers; ErSol is making great strides towards this end and currently has a line of cells

under 200 µm. Wafers should be less than 200 µm with a similar amount of kerf loss as

a standard by 2009. Further improvements in making thinner wafers may be diffi cult to

achieve due to increased breakage when wafers get too thin.

Increasing the effi ciency of the cells is another method of lowering silicon use. SunPower

has achieved over 20 percent cell conversion effi ciency. Additionally, in June 2007, Sanyo

announced the achievement of the world’s highest energy conversion effi ciency in crystalline

silicon solar cells: 22 percent. Sanyo is currently engaged in applying this research-level

achievement to mass production.38

Ingot processing offers another opportunity to reduce silicon waste. Solaicx, located in

California, US, has a continuous CZ process that the company claims to be faster and less

wasteful than the traditional method for making monocrystalline ingots.

7.3 New Silicon Processing – Upgraded Metallurgical SiliconEven while the existing and many new entrants are attempting to expand the use of

traditional Siemens’ based polysilicon production, many other companies are pursuing a

direct upgraded-metallurgical (u-MG) silicon route. The leaders in this include Elkem of

Norway, Dow Corning from their plant in Brazil, and Timminco in Canada.



Though Elkem seems to require a large amount of capital to produce their upgraded

metallurgical silicon (offi cial statistics are not available, but plant schematics suggests a

very capital intense process) perhaps as much as $100 per kg of capital, others such as

Timminco have made claims of capital expansions well below this amount.

Timminco is planning to expand its production to over 14,000 MT per year at a cost of $65

million, or less than $5 per kg of capacity. This seems comparatively very low for polysilicon

production, but channel checks with others and a recent call hosted by the company in

partnership with Photon Consulting confi rms this amount. If accurate, it should result in

polysilicon production costs of below $17 per kilogram, or less than half of most producers

using traditional methods. In addition to being cheaper the time to ramp such a plant is

measured in months, not years. This would be a very competitive product and process

offering that could be disruptive to the overall polysilicon industry in the next few years.

There are meaningful risks to the use of u-MG silicon, however. The biggest is the degree

to which these processes can purify materials and remove impurities that can cause

degradation in the performance of the modules that use is. The contaminants that cause

the biggest concern include boron and phosphorous. Ideally, these contaminants have to

be reduced to less than 1 part per billion (ppb) to ensure module performance at the level

of those using traditional Siemens polysilicon. Timminco shows some contaminants 6 times

this level, as do many of the other u-MG silicon products, such as Dow Corning.

The proof of the pudding is in the eating, as the saying goes. A number of cell and module

manufacturers have been testing these products in-line, including Q-Cells of Germany

which has signed large supply contracts with both Elkem and Timminco. The initial results

that have been reported are that some of these products can be used as blends of 20

to 50 percent of the total polysilicon melt without performance degradation, while some

have reported using 100 percent u-MG material with no adverse effects. Only time will tell

whether these materials actually represent a better economic offering (defi ned as lower

costs and limited performance impacts) for customers – particularly in a world of increased

virgin Siemens product available on the market for reasonable prices.

7.4 Emergence of Alternatives: Gains in Thin-Film Production39

As already mentioned in previous section, silicon-based cell manufacturing using chunk

or granular polysilicon represents the vast majority of PV production, but alternatives are

beginning to break through. Thin fi lms offer benefi ts such as not requiring silicon and

therefore, numerous thin-fi lm expansion plans have been announced recently. Thin-fi lm

solar modules use either a very thin coating of silicon or alternative materials with no silicon,

such as amorphous silicon (a-Si), cadmium telluride (CdTe), or copper indium gallium

selenide (CIGS). Another advantage of thin-fi lm cells is that a whole new range of applications

otherwise not possible using traditional solar cells are enabled because thin-fi lm materials

can be applied to a multitude of surfaces, such as glass, plastic, and fl exible metal foils.

On the other hand, thin-fi lm modules are typically much less effi cient than crystalline silicon

modules, with 7 percent to 11 percent effi ciency compared with silicon’s average 15 percent



effi ciency. Further, while thin-fi lm technologies have the potential to radically cut the cost

of making solar cells in the future, thin fi lms have historically been diffi cult and expensive

to manufacture at large scale. So far, only a few thin-fi lm companies have been able to

grow beyond demonstration plants. Currently, there are a number of companies that are

producing thin-fi lm PV cells, but the majority of them are small and/or startup companies.

Increased PenetrationAlthough thin-fi lm PV has been around for many years, its share in the PV market has

recently increased from 4 percent to 8 percent. In addition, manufacturers’ plans and

rapidity of deployment suggest that its market share will continue to grow in the next decade,

rising to 20 percent of the PV market in 2010, and potentially dominate the industry within

a decade after that.

During the past year, there have been important announcements by thin-fi lm companies,

providing evidence of innovation, investments, and increase production capacity in the

sector. In recent months, announcements of increased thin-fi lm cell production have

outnumbered those touting increased silicon cell production.

In November 2007, Schott Solar inaugurated its industrial mass production of thin-fi lm solar

modules with a module capacity of 33 MW per year and invested €75 million. Including

other Schott Solar projects, the company plans to expand its product capacities for thin-fi lm

modules to 100 MW per year by 2010.

Another example is First Solar, which currently has capacity to make up to 210 MW of

panels per year and plans an expected capacity of 360 MW.

In March 2007, Sharp Corporation announced a ¥72 billion investment to build a thin-

fi lm solar cell plant, which will begin to operate in 2010 with 480 MW of initial production.

Together with other plants, this will expand Sharp’s global total production capacity for thin-

fi lm solar cells to 1 GW in April 2010.

Thin-fi lm companies could have a competitive edge if solar panel prices fall by 2010,

as expected. However, start-ups would face challenges, as catching up with established

suppliers such as First Solar, and it is estimated that new business plans should be able

to manufacture solar modules at $0.80/watt, and sell them for less than $1.50/watt quite

profi tably.

7.5 Concluding ThoughtsBased on our assessment of the planned new silicon production capacity, we predict that

the worst of the silicon shortage will be over by the end of 2008 and that the PV industry

will have an average production growth rate between 2008 and 2010 of approximately 50

percent per year. By 2010, we forecast global PV module potential production to be nearly

14 GW, though demand may not rise to that level without signifi cant new national support

policies and meaningful drops in module prices. Even then, some excess production may

still exist that will be dealt with through idle capacity or plants whose completion is pushed

out until demand again catches up with supply.



While circumstances may cause production in 2010 to be higher or lower than 14 GW, it

is certain that the fundamental structure of the PV industry is changing. The polysilicon

shortage has already caused companies to shift business strategies; the past three years of

high prices and tight supply has led to consolidation all along the supply chain. By 2012,

we expect the industry to be dominated by a smaller number of large vertically-integrated

companies who can deliver PV at or near grid-parity for customers. That will mark a

fundamental shift in the energy world indeed.



HSC produces polysilicon at its plant in Michigan

In November 2005, HSC announced a nearly $500 million expansion. It is on schedule for start-up and is expected to come on line in early 2008. In May 2007 the company announced the largest expansion ever in polycrystalline silicon manufacturing. HSC will invest up to $1 billion in the next 4 years to expand its Michigan facility. The expansion, which is expected to start coming online in 2010, will add up to 17,000 MT of polycrystalline silicon suitable for both the solar and semiconductor markets increasing the company’s total annual output of polycrystalline silicon to 36,000 MT.

HSC is expanding capacity at its Michigan plant facility but is contemplating other locations for some of the additional capacity. A location in Asia might be attractive to the company, considering the huge market potential there for solar energy and the fact that HSC´s current production is exclusively in United States.

8 APPENDICES

8.1 Current Producers

HSC GEDDES RD. 12334NO 48626 MICHIGAN UNITED STATESPHONE: +1 (989) 642-5201WWW.HSCPOLY.COM

HEMLOCK SEMICONDUCTOR CORPORATION (HSC)

HEMLOCK SEMICONDUCTOR CORPORATION (HSC). After having produced polysilicon since 1957, Dow Corning formed HSC, located in Michigan, U.S., as a wholly owned subsidiary.

In 1984, HSC became a joint venture between Dow Corning, (63 percent ownership), Shin-Etsu Handotai Co, Ltd. (25 percent) and Mitsubishi Materials Corporation (12 percent).

Hemlock rapidly increased capacity, and by 1994 it became the largest polysilicon supplier in the world. HSC is still the largest polysilicon producer, and will likely continue to be through 2010 based on stated and likely capacity additions.

Products and Services

POLYCRYSTALLINE SILICON FOR SEMICONDUCTOR MICROCHIPS. Super pure polycrystalline silicon manufactured by HSC is sold in the form of chunks or rods and the material is converted by HSC customers into single crystal ingots, which are sliced into wafers and polished. These wafers are supplied to semiconductor device manufacturers who fabricate various types of electronic devices such as microprocessors, DRAMS, ASICS, etc. HSC is the world’s largest supplier of semiconductor polysilicon.

POLYCRYSTALLINE SILICON FOR PHOTOVOLTAICS (SOLAR CELLS). Solar cells made from either polysilicon or single crystal silicon convert solar energy directly into electricity. HSC is a leading supplier of this type of polysilicon.

SILICON CHEMICALS FOR SEMICONDUCTORS AND OTHER USES. For semiconductors and other uses very pure dichlorosilane (H2SiCl2), trichlorosilane (HSiCl3), and silicon tetrachloride (SiCl4) are produced and sold. The semiconductor customer often deposits thin layers of tailored single crystal silicon on wafers to obtain desired electronic properties. These wafers are the basis of the microchips that supply the electronics industry.

Business Description

Facilities and Expansion Plans

HSC Plant, Michigan, United States

MICHIGAN, US(SIEMENS)

2007: 10,010 MT2008: 14,630 MT

HEMLOCK SEMICONDUCTOR CORPORATION (HSC)



The 2006 capacity was approximately 10,000 MT, of which more than 40 percent went into the solar industry. When current $1 billion investment has been fully completed in 2012, HSC will have a total polysilicon capacity of 36,000 MT.

Key Financial Information

There is no fi nancial information available. However, Dow Corning, major owner of HSC, reported that sales and prof-

its in 2007 were primarily driven by HSC.

Production, Capacity and Polysilicon Long-term Contracts

HSC Production (MT) Capacity (MT)2006 8,850 10,0002007 10,005 10,0102008e 12,320 14,6302009e 16,815 19,0002010e 21,000 23,0002011e 25,250 27,5002012e 31,750 36,000

Production and Capacity of Polysilicon (MT)

0

4,000

8,000

12,000

16,000

20,000

24,000

2006 2007 2008e 2009e 2010e 2011e 2012e

Capacity Production

Polysilicon Long-term Contracts

Customer Date signed Contract amount ($ mn)

Contract period

ErSol Jul-06 NA 2009-2018Sunpower Jul-07 NA 2010-2019

Break-down of Ownership

RICK DOOMBOSPRESIDENT AND CEO

NAMEPOSITION

Key Management and Ownership Information

Source: www.hscpoly.com, www.enf.cn, www.sramanamitra.com, www.renewableenergyworld.com, Q-Series Global Solar Industry, Solar Industry Report



WACKER POLYSILICON has been signifi cantly expanding its polysilicon capacities since the early 1990s. The division forecasts high single-digit growth for the electronics industry and double-digit rates for the photovoltaics sector over the next few years. In response, Wacker Polysilicon is specifi cally boosting solar polysilicon production capacities. Multi-year supply agreements with customers and associated advance payments are among the various adopted

WACKER CHEMIE AGHANS-SEIDEL-PLATZ 481737 MUNICHGERMANYPHONE: +49-89-6279-0 WWW.WACKER.COM

WACKER CHEMIE AG

WACKER CHEMIE AG (GR:WCH), headquartered in Germany, was founded by Dr. Alexander Wacker in 1903 as “Dr. Alexander Wacker Gesellschaft für elektrochemische Industrie KG.” This consortium moved to Munich two years later and started WAKER CHEMIE AG. The chemical company supplies silicon, silicone, and silanes to the personal computer, telecom, and electronics industries.

WACKER business is divided into fi ve units: Silicones, Polymers, Fine Chemicals, Polysilicon and Siltronic. Wacker silicones is the world’s third-largest supplier of silicone products, and the leader in masonry-protection silicones. Wacker polymers is the No.1 manufacturer of dispersible polymer powders and dispersions with approx. 50 percent market share. Wacker fi ne chemicals is the product leader in specifi c fi ne chemical and biotech segments for the life science, food and consumer care industries. Siltronic has been ranked as a world-leading supplier of silicon wafers for over 50 years and is currently the third-largest partner to the semiconductor, electronics and chipmaking industries. Finally, Wacker polysilicon is the second-largest global manufacturer of polycrystalline hyperpure silicon for electronic and solar applications. Its polysilicon is used through-out the semiconductor industry and in the photovoltaics sector.


WACKER SILICONES DIVISION. The division, which accounts for 31percent of total net sales, ranks among the world’s leading manufacturers of silanes and silicones. Its product portfolio ranges from silanes through silicone fl uids, emulsions, elastomers, sealants and resins to pyrogenic silicas.

WACKER POLYMERS DIVISION. The division, which accounts for 16 percent of total net sales, manufactures cutting-edge products such as polymer powders, polyvinyl acetates and surface coating resins. They are used in a wide variety of industrial applications and as base chemicals.

WACKER FINE CHEMICALS DIVISION. The division, which accounts for 3 percent of total net sales, manufactures a wide range of products such as pharmaceutical proteins, natural and biotech-based cyclodextrins and cysteine. Possible application areas range from pharmaceuticals, agrochemicals and cosmetics.

SILTRONIC DIVISION. The division, which accounts for 37 percent of total net sales, is one of the world’s top manufacturers of hyperpure silicon wafers and supplier to many leading chip manufacturers. Its customers use silicon wafers to produce discrete semiconductor devices (transistors, rectifi ers) and ICs (e.g. microprocessors, memory chips). Siltronic produces monocrystals by the Czochralski and fl oat zone methods and processes them into silicon wafers. Monocrystals are manufactured from polycrystalline hyperpure silicon. Wafers are produced to individual customer specifi cations.

WACKER POLYSILICON DIVISION. The division, which accounts for 13 percent of total net sales, is now the world’s second-largest producer of polysilicon (polycrystalline hyperpure silicon), with a 17 percent global market share. Having performed pioneering work over the past six years as a supplier to the photovoltaics industry, the division is both the technology and cost leader in this market segment. Its product portfolio includes polysilicon, pyrogenic sili-cas (HDK), chlorosilanes, and sodium chloride.





Annual capacity of polysilicon currently amounts to approximately 10,000 MT. Wacker has under construction a 4,500 MT capacity facility at Burghausen which is expected to be fi nished by the end of 2008. The company has also a plan under approval of 7,000 MT capacity that is expected to be fully operated by the end of 2010. When completion of expansion projects in 2010, Wacker will have an annual polysilicon capacity of 22,500 MT.

Key Financial Information (only for Wacker Polysilicon) Wacker Polysilicon benefi ted from both price and production-volume increases, the latter stemming from expanded hyperpure polycrystalline silicon capacity, in 2007. Polysilicon output rose 30 percent over 2006, reaching 8,100 MT. Based on preliminary fi gures, Wacker Polysilicon expects to post full-year sales of €457m for 2007 a rise of 40 percent over 2006.


measures to fi nance the substantial investment costs.

Wacker Polysilicon aims to further strengthen its market position by increasing annual polysilicon capacities to some 21,500 MT by the end of 2010 at Burghausen, Wacker’s principle production site and the largest chemical site in Bavaria.

The division also aims to introduce an innovative process for producing granular polysilicon (with trichlorosilane as the feedstock) and thus provide the photovoltaics industry with new ways of producing silicon crystals. This process is currently being tested on an industrial scale at two pilot reactors.

BURGHAUSEN, GERMANY(SIEMENS)

2007: 10,000 MT2008: 14,500 MT

WACKER CHEMIE AG

WACKER Production (MT) Capacity (MT)2006 6,000 6,5002007 6,500 10,0002008e 13,375 14,5002009e 14,500 14,5002010e 18,500 22,5002011e 22,500 22,5002012e 22,500 22,500

Polysilicon Long-term ContractsCustomer Date signed Contract

amount ($ mn)Contract period

Trina Solar Feb-07 NA 2009-2014ATS Automation Tooling Sysmtem

Sep-07 NA 2010-2018

ErSol Dec-07 NA 2010-2019


0

4,000

8,000

12,000

16,000

20,000

24,000

2006 2007 2008e 2009e 2010e 2011e 2012e

Capacity Production

Wacker´s Plant in Burghausen



PETER WACKERPRESIDENT AND CEO

RUDOLF STAUDIGIEXECUTIVE BOARD MEMBER

NAMEPOSITION


0

200

400

600

800

1000

2005 608 702 715 731

2006 799 830 857 851

2007 944 959 959 920

Grow th 22% 19% 11% 18%

1Q 2Q 3Q 4Q

Revenues (€ Millions)

*4Q 07 revenues is a preliminary business results estimate.


Source: www.wacker.com, www.renewableenergyworld.com, Solar Energy Report



Tokuyama expanded its polysilicon capacity by 400 tons per year in December 2004, to a total capacity of 5,200 tons citing the growth in solar energy as well as in the rebounding semiconductor industry. In the growing fi eld of solar cells, customers are demanding lower-cost materials to further proliferate.

In the fumed silica business, which is growing rapidly in Asian markets, such as China and South Korea, a new plant with an annual capacity of 5,000 tons is now under construction in China. The plant is scheduled to be in operation at the end of 2007/ 1Q08. Regarding polycrystalline silicon for semiconductors and solar cells, which has been in a tight supply-demand situation, the Company has made the decision to expand production facilities by 3,000 MT per year in the Tokuyama Factory in December 2006. The total amount of investment will be ¥ 45 billion and the Company started construction in June 2007 for completion in spring 2009.

TOKUYAMASHIBUYA 3-3-1 NO- 150-8383 SHIBUYA - KU TOKYO, JAPANPHONE: +81-3-3499-8030WWW.TOKUYAMA.CO.JP

TOKUYAMA CORPORATION

TOKUYAMA (TYO: 4043) was started in 1918 under the name Nihon Soda Co. Ltd., which was changed to Tokuyama Soda Co. Ltd in 1939. The focus of the company was soda ash until 1938, when it moved into the cement business. Headquartered in Yamaguchi, Japan, the Company operates three business segments (chemicals, building materials and specialty products) that serve various industries. Tokuyama has offi ces and factories throughout Japan, as well as offi ces in the United States (California), Germany (Düsseldorf), Singapore, etc.

Tokuyama is the only manufacturer of polysilicon in Japan not affi liated with any corporate conglomerate. Tokuyama is a top manufacturer of fumed silica in Asia, ranking fourth in the world in terms of capacity. After forming a partnership with OSC in Taiwan in 2003 in precipitated silica, Tokuyama is enhancing its presence as a major player in Asia with presence in Japan, Taiwan, Thailand, and China.


CHEMICALS BUSINESS. The division, which accounts for 38 percent of total net sales, produces and markets a wide range of products from basic chemicals such as caustic soda, soda ash, and chlorine to advanced substances such as the microporous fi lms “NF Sheets,” and “Porum.”

CEMENT, BUILDING MATERIALS AND OTHERS BUSINESS. The division, which accounts for 31 percent of total net sales, is involved in the manufacture and sale of Portland cement, blast furnace cement, concrete and construction materials, the management of real estate, as well as the provision of transportation services.

SPECIALTY PRODUCTS BUSINESS. The division, which accounts for 31 percent of total net sales, offers multicrystalline silicon, wet silica, dry silica, aluminum nitride, dental equipment, plastic lenses, agricultural chemical intermediates, ion-exchange membranes, metal cleaning chemicals, environmental equipment and semiconductor gas sensors. Tokuyama is one of a select few manufacturers in the world that produce both fumed and precipitated silica. Tokuyama provides fumed silica under the Reolosil brand name and precipitated silica under the TOKUSIL and FINESIL brand names.


Facilities and Expansion Plans (only for Specialty Products Business)

Verifi cation plant for polycrystalline silicon for

solar cells

Building site at Higashi Plant



Construction of the VLD plant was initiated in February 2005. This verifi cation plant took the previous pilot plant a stage further, and was built with a view to commercial production. The annual polycrystalline capacity of the plant is 200 MT and should be operational for 2009. The company expects to complete the plant at a cost of ¥3 billion.

The New Energy and Industrial Technology Development Organization (NEDO) in Japan offered funding for the

The new plant (Siemens method) under construction at Yamagushi, Japan will have an annual capacity of 3,000 MT, which consists of 2,500 MT for semiconductors and 500 MT for solar cells. When completion of the plant, the annual capacity for polycrystalline silicon will be 8,200 MT. The construction started in June 2007 and its completion is scheduled for spring 2009. Due to infrastructure restrictions, however, it is not expected for the time being that the newly – added plant will operate at full capacity.

The VLD plant is also located in Japan and will have an annual capacity of 200 MT. VLD Technology allows for faster production and produces a more appropriate product for PV applications (quality is inferior for semiconductor applications). The company is implementing verifi cation tests to establish the necessary technology.

Production, Capacity (only for Specialty Products Business) and Polysilicon Long-term Contracts

YAMAGUSHI, JAPAN(SIEMENS)

2007: 5,200 MT2008: 5,200 MT

YAMAGUSHI, JAPAN(SIEMENS)

2007: CONSTRUCTION2008: CONSTRUCTION

TOKUYAMA CORPORATION

CHINA(SIEMENS)

2007: CONSTRUCTION2008: 5,000 MT

YAMAGUSHI, JAPAN(VLD)

2007: 200 MT2008: 200 MT

TOKUYAMA Production (MT) Capacity (MT)*2006 5,350 5,4002007 5,400 5,4002008e 5,500 5,6002009e 6,900 8,2002010e 8,200 8,2002011e 8,200 8,2002012e 8,200 8,200


0

2,000

4,000

6,000

8,000

10,000

2006 2007e 2008e 2009e 2010e 2011e 2012e

Capacity Production

*In our estimates, we are not factoring in the new plan in China to be operating at full capacity by 2008.

No information available for Polysilicon Long-term Contracts.

Key Financial Information (only for Wacker Polysilicon)

Total sales in this segment were ¥73.9 billion during fi rst nine months of FY2007, an increase of 13.6 percent compared with the corresponding period of the previous year.

Sales of polyscrystalline silicon and fumed silica remained brisk during the fi rst nine month of FY2007. Results for photoresist developer for semiconductors and LCDs were also fi rm. A&T Corporation recorded solid results, owing to cost reduction together with higher sales of laboratory information systems and other products.



SHIGEAKI NAKAHARAPRESIDENT

YOSHIKAZU MIZUNOEXECUTIVE MANAGING DIRECTOR

NAMEPOSITION


Revenues (¥ Millions)


06

1218243036

2005 1 34 19 13

2006 21 11 32 12

2007 25 14 35 17

Grow th 15% 24% 9% 44%

Q1 Q2 Q3 Q4

Source: www.tokuyama.co.jp, Q-Series Global Solar Industry



MEMC Pasadena, Inc. In 1995, MEMC purchased the facility and renamed the operation “MEMC Pasadena Inc.” Soon after the acquisition, MEMC expanded production. It produces ultra-pure granular polysilicon, the base material for the manufacturing of silicon wafers. Monosilane and SiF4 gas, a by-product of the granular polysilicon manufacturing process, are also produced at Pasadena. The facility is now a major world supplier of semiconductor and solar-grade polysilicon and semiconductor-grade silane.

At the Merano, Italy site, MEMC manufactures single crystal ingots and polysilicon. Silicon research began at the plant in 1961, and a pilot line, poly through polished slice, started in 1968. In 1976, industrial production began for poly and single crystal.

MEMC and Conergy announced they have executed a defi nitive agreement for MEMC to supply solar grade silicon

MEMC ELECTRONIC MATERIALS, CORP.PEARL DRIVE 501 NO 63376 ST. PETERS MISSOURI, USPHONE: +636-474-5443WWW.MEMC.COM

MONSANTO ELECTRIC

MONSANTO ELECTRONIC MATERIALS CORPORATION (MEMC) (NYSE: WFR) is a global leader in the manufacture and sale of wafers and related intermediate products to the semiconductor and solar industries. Founded in 1959 in St. Peters, Missouri as a division of Monsanto Chemical Company, the focus of the company was to produce silicon wafers (19mm diameter) for the transistor and rectifi er industries. The German company Hüls, AG (a VEBA AG subsidiary) assumed ownership of MEMC in 1989, and then consolidated the company with an Italian company, Dynamit Nobel Silicon Holdings. The consolidated company was renamed MEMC Electronic Materials, Incorporated.

MEMC operates nine manufacturing facilities in every key semiconductor region in the world, including Japan, Korea, Malaysia, Taiwan, Europe and the United States. MEMC is the only company producing granular polysilicon at industrial scale.


STANDARD POLISHED WAFER. The prime polished wafer is a highly refi ned, ultrapure wafer of crystalline silicon with ultrafl at and ultraclean surfaces. Sophisticated chemical-mechanical polishing (CMP) processes remove surface defects and produce extremely fl at, mirror-like surfaces.

STANDARD CMOS EPI. Epitaxial wafers consist of a thin, single crystal silicon layer grown on the polished surface of a silicon wafer substrate, providing for increased reliability of the fi nished semiconductor device, greater effi ciencies during the semiconductor manufacturing process, and ultimately more complex integrated circuit devices.

PERFECT SILICON. Perfect Silicon™ brand wafers utilize MEMC’s proprietary defect-free crystal growth process designed to completely suppress the formation of low-density, grown-in defects. The main principle behind the CZ single-crystal growing process lies in the rapid transport of growth-incorporated excess intrinsic point defects to harmless sinks before they have a chance to react to form defects.

MAGIC DENUDED ZONE is a patented, rapid method of achieving reproducible and reliable internal gettering in silicon wafers. It is a Rapid Thermal Process (RTP) based technique in which the oxygen precipitation behavior is controlled by the manipulation of vacancy rather than oxygen concentration profi les.



Pasadena, Texas



Annual polysilicon capacity at MEMC was 4,400 MT in 2006. The Merano capacity was 1,100 MT, while the Pasadena plant’s capacity was 2,700 MT and dust and recycling accounted for 600 MT .

During 2007, MEMC increased its annual polysilicon capacity to over 6,700 MT. The Company reported a construction incident caused by one of its electrical subcontractors working on the Pasadena, Texas polysilicon facility expansion. The disruption has caused the delay of the on-going polysilicon expansion project at the site.

MEMC is targeting to achieve 8,800 MT of annualized polysilicon capacity between the two plants for 2008.


TOKUYAMA Production (MT) Capacity (MT)*2006 5,350 5,4002007 5,400 5,4002008e 5,500 5,6002009e 6,900 8,2002010e 8,200 8,2002011e 8,200 8,2002012e 8,200 8,200

* Capacity data includes dust and recycling in addition to the above mentioned plants.



The company’s net sales increased by 25 percent y-o-y to $1,922 million, while operating income increased by 52 percent y-o-y to $849.9 million, or 44.2 percent of sales for 2007.

The company reported 4Q07 net sales of $535.9 million, which represents an increase of 27.4 percent over 4Q06. Net increase in sales was primarily the result of higher product volumes. The company achieved operating income during 4Q07 of $254.8 million, a 51.1 percent increase q-o-q, due to higher gross margin and declining operating expenses as a percentage of net sales.

wafers to Conergy over a 10-year period, with pre-determined pricing, on a take or pay basis beginning in the third quarter of 2008.

MEMC and Gintech have executed an amendment to their existing defi nitive agreement for MEMC to supply solar grade silicon wafers to Gintech. MEMC will supply additional solar wafers to Gintech over the 10-year contract period, with incremental pre-determined pricing, on a take or pay basis beginning in 2008.

TEXAS, US(FBR)

2007: 4,400 MT (EST)2008: 6,000 MT (EST)

MERANO, ITALY(SIEMENS)

2007: 1,600 MT (EST)2008: 2,000 MT (EST)

MEMC


02,0004,0006,0008,000

10,00012,00014,000

2006 2007e 2008e 2009e 2010e 2011e 2012e

Capacity Production





Revenues ($ Millions)

0

100

200

300

400

500

600

2005 251 272 281 303

2006 342 371 408 421

2007 440 473 473 536

Grow th 29% 28% 16% 27%

1Q 2Q 3Q 4Q

NABEEL GAREEBRESIDENT AND CEO

KEN HANNAH SENIOR VP AND CFO

NAMEPOSITION

Source: www.memc.com, Bloomberg, Q-Series Global Solar Industry



REC Silicon’s fi rst plant was established in Moses Lake, Washington. In August 2002, REC Solar Grade Silicon (SGS) was established as a joint venture between REC and ASiMI, at that time a subsidiary of the Japanese industrial group Komatsu Ltd. Production was launched in November, 2002, after converting ASiMI’s former plant in Moses Lake, Washington, into the world’s fi rst dedicated plant for production of solar

grade silicon. In 2005, REC acquired, as part of the acquisition of ASiMI, the remaining SGS shares and SGS is now a wholly-owned subsidiary of REC. At the plant in Moses Lake, only solar grade silicon qualities are produced.

REC started, in October 2005, a project to build a new polysilicon plant in Moses Lake, Washington, based on the proprietary FBR technology. An

REC ASAKJØRBOVEIEN 29 NO-1337 SANDVIKA NORWAYPHONE: +47-67-57-44-50WWW.RECGROUP.COM

RENEWABLE ENERGY CORPORATION

REC (OSE: REC) was incorporated as a Norwegian private limited company in 1996 (originally named Fornybar Energi AS), focusing on investments in renewable energies, in Norway and internationally. It is the only solar energy company to span the entire value chain, from silicon purifi cation to fi nished solar module product.

REC’s business activities are organized in three divisions: REC Silicon, REC Wafer and REC Solar. REC Silicon produces silicon materials mainly for the PV industry, but also for a limited number of electronics customers; REC Wafer produces multi- and monocrystalline wafers for the PV industry, while REC Solar produces solar cells and solar modules.

REC partnered with Q-Cells and Evergreen Solar in the EverQ Company which converts polysilicon into modules. REC supplies polysilicon, Q-Cells provides manufacturing know how, and Evergreen provides a string ribbon manufacturing technology that uses much less silicon than traditional manufacturing technologies.


REC SILICON DIVISION. REC holds the rights to the unique and proprietary polysilicon production technology based on monosilane gas which is a closed-loop process with hardly any by-products or bothersome waste materials. The new production technology features polysilicon deposition in fl uidized bed reactors (FBR) instead of the more traditional thermal deposition furnaces or “Siemens reactors.” REC Silicon has run continuous test production with the FBR technology. The technology provides substantial reductions in investment and dramatic reductions in energy consumption.

REC WAFER DIVISION. REC Wafer consists of two business units. REC ScanWafer is the world’s largest supplier of multicrystalline silicon wafers to the solar energy industry. REC SiTech produces monocrystalline ingots which are processed into wafer for high-effi ciency monocrystalline solar cells.

REC SOLAR DIVISION. REC Solar manufactures solar cells at its plant in Narvik (Norway) and solar modules at its facility in Glava (Sweden). In addition, the division is engaged in a small residential systems installation business in South Africa. REC Solar produces solar cells and modules based on multicrystalline silicon wafers mainly supplied by REC Wafer.


Facilities and Expansion Plans (only for REC Silicon)

Moses Lake Plant



Annual capacity of Solar and electronic grade (EG) silicon currently amounts to approximately 6,000 MT, of which more than 60 percent goes into the solar industry. With the additional capacity in Moses, Lake and the de-bottlenecking at existing facilities in Butte, REC will have a total polysilicon capacity of 13,500 MT by 2009. The polysilicon production will be split between 6,500 MT of granular and 7,000 MT of rod/chunk material.


investment decision was made in May 2006 for a plant with a design capacity of 6,500 MT of granular polysilicon and 9,000 MT of silane gas. Due to REC’s limited project management capacity at that time, Fluor Corporation was chosen as Engineering, Procurement, Construction & Management Assistant contractor. The overall capital investment has consequently been revised to close to $ 800 millions and Commercial production is now scheduled to start late fourth quarter 2008.

With its plant in Butte, Montana, REC Silicon is the largest and leading worldwide manufacturer and supplier of silane gas (SiH4). The plant’s high-purity silane, large manufacturing capacity, bulk delivery system, global distribution network and safe handling expertise all provide signifi cant advances for customers seeking improved performance and cost. The plant is a world-class, ISO 9002 and ISO 14001-registered manufacturing facility in the scenic Rockies at Butte, Montana. This 240-acre site has two silane production units.

REC has initiated a $ 50 million investment to further increase polysilicon production by close to 16.7 percent through de-bottlenecking, at the existing plant in Butte, Montana, US. The project consists of both adding silane gas capacity and modifying nearly 1/3 of the Siemens reactors installed at the plant. This will contribute to maximize the production from the existing Siemens based facilities throughout 2008. The revised debottlenecking schedule will also coincide with the additional reactor modifi cations announced in April 2007 and expected to be on-stream by late 4Q 2009.

MONTANA, US(SIEMENS)2007: N/A

2008: 1,000 MT

WASHINGTON, US(FBR)

2007: N/A2008: 6,500 MT

WASHINGTON, US(SIEMENS)2007: N/A2008: N/A

MEMC

Production and Capacity of Polysilicon (MT)REC Production (MT) Capacity (MT)2006 5,250 5,5002007 5,633 6,0002008e 6,667 7,5002009e 10,350 13,5002010e 13,450 19,5002011e 13,500 20,0002012e 13,500 20,000

0

5,000

10,000

15,000

20,000

25,000

30,000

2006 2007 2008e 2009e 2010e 2011e 2012e

Capacity Production

Polysilicon Long-term ContractsCustomer Date signed Contract

amount ($ mn)Contract period

EverQ GmbH

2006 NA NA

SunPower Oct-06 20 2007SUMCO TECHXIV Corporation

Mar-07 785 2007-2013



Key Financial Information (only for REC Polysilicon)

Revenue amounted to NOK 2,496 million for 2007, an increase of 17 percent over 2006. The y-o-y increases primarily refl ect higher production and higher prices.

REC Silicon achieved revenue of NOK 637 million in the 4Q2007, an increase of 18 percent over 4Q 2006. The y-o-y increases primarily refl ect higher production and higher prices. EBITDA was NOK 352 million for 4Q07, an increase of 10 percent over 4Q06.

Revenues (NOK Million)

$0

$100

$200

$300

$400

$500

$600

$700

2005 $69 $100 $346 $503

2006 $521 $525 $539 $542

2007 $635 $627 $597 $637

Grow th 22% 19% 11% 18%

1Q 2Q 3Q 4Q



ERIK THORSEN PRESIDENT AND CEO – REC GROUP

JOHN ANDERSEN, JR. EVP – REC SOLAR & GROUP COO

NAMEPOSITION

Source: www.recgroup.com, www.renewableenergyworld.com Bloomberg, Q-Series Global Solar Industry



MITSUBISHI MATERIALS CORPORATIONOTEMACHI 1- CHOME 5-1, NO 100-8117 CHIYODA-KU, TOKYO, JAPANPHONE: +81-3-5252-5206WWW.MMC.CO.JP

MITSUBISHI MATERIALS CORPORATION

MITSUBISHI MATERIALS CORPORATION (TYO: 5711) is a Japan-based manufacturing company engaged in eight main business segments: Cement business, Metals business, Advanced Materials & Tools business, Aluminum business, Electronic Materials & Components business, Energy business, Precious Metals business and Recycling business. Mitsubishi Materials comprises 239 subsidiaries and affi liates in 25 countries.

MITSUBISHI MATERIALS CORPORATION holds 100 percent ownership of Mitsubishi Polycrystalline Silicon America Corporation in Mobile, Alabama and 28 percent of SUMCO Corporation in Japan.

In July 1999, Sumitomo Metal Industries, Ltd., Mitsubishi Materials Corp. and Mitsubishi Materials Silicon Corp. established a jointly-owned company developing and manufacturing 300 mm silicon wafers named Silicon United Manufacturing Corp.

In February 2002, Silicon United Manufacturing Corp. acquired the silicon wafer business from Sumitomo Metal Industries Corp., merged with Mitsubishi Materials Silicon Corp. and changed its trade name into Sumitomo Mitsubishi Silicon Corp., at the same time.


CEMENT BUSINESS. The division, which account for 14 percent of total net sales, develops and manufactures a range of high-grade products. An international network complements fi ve domestic production bases.

METALS BUSINESS. The division, which accounts for 41percent of total net sales, has captured a top share of the global market for oxygen-free cooper and cooper alloys that result from special melting and casting processes for high-purity electrical cooper.

ADVANCED MATERIALS & TOOLS BUSINESS. The division, which account for 10 percent of total net sales, provides an array of advanced materials for basic and high-tech industries. These materials include offerings that deliver superior resistance to heat, corrosion and wear, performance materials, and precision castings.

ALUMINIUM BUSINESS. The division, which accounts for 11 percent of total net sales, aims to broaden demand for aluminum, such as through aluminum beverage bottles, rolled and extruded automotive products and daily items.

ELECTRONIC MATERIALS & COMPONENT BUSINESS. The division, which currently accounts for 6 percent of total sales, includes materials, electronic components and silicon, and mainly serves makers of semiconductors devices and telecommunications equipment. Regarding its silicon business, Mitsubishi produces and sells polycrystalline silicon mainly for equity method affi liate SUMCO, which makes silicon wafers.

OTHERS. This segment, which accounts for 18 percent of total net sales, encompasses energy, precious metals resources, environmental and recycling and real state operations. ENERGY BUSINESS has contributed to the stable supply of energy in Japan since 1871. The division also looks for ways to halt global warming by drawing on accumulated underground resource development expertise to promote geothermal power, by encouraging effi cient use of water resources to generate hydroelectric power, and by curbing carbon dioxide emissions. PRECIOUS METALS BUSINESS is a gold producer with sales of gold for industrial use as well as for individual use in Japan. Its jewelry fair and mail-order catalog sales activities are now both reputed to be the largest in Japan. The division is also involved in gift and hobby products made of precious metal, such as Fine Gold Card and Precious Metal Clay. RECYCLING BUSINESS is involved in various recycling businesses, such as household appliance and waste concrete recycling, as well as dioxin analysis and elimination.

Mitsubishi Polycrystalline Silicon America Corporation, located in Mobile, Alabama is one of the newest members




The company has already completed a project in Alabama to manufacture an additional 300 MT every year and is currently working to secure customer certifi cation so that it can operate at a full 1,500 MT of annual capacity by summer 2007. The company also plans to raise annual capacity at its Yokkaichi Plant in Japan by 150 MT, to 1,800 MT per year.

The company plans to raise production of polycrystalline silicon, largely for SUMCO, and aim to increase annual capacity of polycrystalline silicon by a level of 1,000 MT, in addition to an ongoing 450-ton production increase.


ALABAMA, US(SIEMENS)

2007: 1,500 MT2008: 1,500 MT

YOKKAICHI, JAPAN(SIEMENS)

2007: 1,800 MT2008: 1,800 MT

MITSUBISHI MATERIALS CORPORATION


of the Mitsubishi Materials family. Founded in 1950, Mitsubishi Materials Corporation has grown to prominence as a process manufacturer, specializing in the smelting, refi ning and fabrication of metals as well as the manufacture of cement and aluminum cans. Mitsubishi Materials is also a supplier of advanced electronic products, silicon wafers and related materials.

Facilities and Expansion Plans (only for Electronic Materials & Component)

The company expects demand to stay robust for the polycrystalline silicon and has accordingly decided to merge a subsidiary polycrystalline silicon company to stimulate further growth. As regards semiconductor silicon wafers, the company intends to satisfy strong demand by boosting capacity through investment.

Regarding silicon processed products, the company plans to meet strong demand for solder paste used in semiconductor devices by investing heavily to boost manufacturing capacity.

Mitsubishi will build a vertical value chain with SUMCO in the silicon business, which plans to signifi cantly increase its business in 300 mm wafers.

MITSUBISHI Production (MT) Capacity (MT)2006 3,000 3,1502007 3,225 3,3002008e 3,300 3,3002009e 3,495 3,6902010e 3,874 4,0592011e 4,262 4,4652012e 4,689 4,912 0

5001,0001,5002,0002,5003,0003,5004,0004,5005,000

2006 2007e 2008e 2009e 2010e 2011e 2012e

Capacity Production No information available for Polysilicon Long-term Contracts.

Key Financial Information (only for Electronic Materials & Component) Electronic Materials & Component segment reported ¥ 85.1 million of sales for FY 2007. Sales from polycrystalline silicon increased because of higher production and prices in response to strong demand for 300 mm wafers, the segment driver, as well as expanded semiconductor markets and brisk activity among solar cell markets.

Operating profi t was ¥ 10.4, an increase of 115.8 percent y-o-y.

During nine months ended December 31, 2007, the division reported ¥ 74.0 billion, an increase of 13.5 percent q-o-q. Sales and profi ts of polycrystalline silicon advanced due to continued favorable sales of 300-mm silicon wafers, as well as enhanced production ability of Mitsubishi Polycrystalline Silicon America Corporation.






AKIHIKO IDE PRESIDENT

HARUHIKO ASAO EXECUTIVE VICE PRESIDENT

NAMEPOSITION

Source: www.mmc.com.jp, Solar Industry Report, Q-Series Global Solar Industry

0

5

10

15

20

25

2006 18 18 21 19

2007 21 22 22 20

Grow th 20% 22% 3% 8%

1Q 2Q 3Q 4Q



OSAKA TITANIUM TECHNOLOGIES1 HIGASHIHAMA-CHO AMAGASAKI660-8533 HYOGO JAPANPHONE: +81-6-6413-9911 WWW.OSAKA-TI.CO.JP

OSAKA TITANIUM TECHNOLOGIES

OSAKA TITANIUM TECHNOLOGIES (JP: 5726), headquartered in Japan, is an affi liated company of Sumitomo Metal Industries and Kobe Steel. It became Japan’s fi rst successful industrialized titanium company in 1952 and remains the country’s pioneer in titanium sponge production. Since 1960 it has also manufactured polycrystalline silicon. The Company has continued to produce titanium and silicon primarily for the aerospace and electronics industries.


TITANIUM BUSINESS RELATED PRODUCTS. Titanium is a plentiful resource, the ninth most common element in the earth’s crust. Titanium’s light weight, strength, and its corrosion-resistant and heat-resistant properties have led to its utilization by aerospace and many other industries, including petrochemical industry, and nuclear and thermal power generation industry. Osaka Titanium Technologies is the world’s leading titanium sponge manufacturer. It also manufactures TICI, Titanium Ingots and Ferro - Titanium. The titanium production process consists of chlorination, distillation, reduction/vacuum separation, electrolysis, crushing, sizing, packaging and melting.

SEMICONDUCTOR AND ENERGY BUSINESS RELATED PRODUCTS. Osaka Titanium Technologies´ polycrystalline silicon products qualify as semiconductor grade. They are used as such semiconductor substrate materials as monocrystalline silicon materials and as materials in parts for solar cells. The Company also recovers high- grade silicon tetrachloride, which is a byproduct of the high-purity silicon manufacturing process. Ultrahigh-purity silicon tetrachloride is produced by repeated refi ning. Silicon tetrachloride is used as a material for high-precision optical lenses and synthetic quartz, and in semiconductor photomasks and optical fi bers. Polycrystalline silicon production consists of conversion process (trichlorosilane manufacture), distillation process (trichlorosilane refi ning), reduction process (polycrystalline silicon manufacture), machining/manufacturing process and recovery process.


JAPAN(SIEMENS)

2007: 1,300 MT2008: 1,400 MT

OSAKA TITANIUM TECHNOLOGIES

Facilities and Expansion Plans (only for polycrystalline silicon) In response to market trends and heavy customer demand, Osaka Titanium Technologies resolved to invest in a ¥ 6, 600 million polycrystalline silicon facility expansion program. On May 2007 Osaka Titanium Technologies announced that the fi rst program step had been completed expanding its annual capacity from 800 MT to 1300 MT. The company will continue pursuing the second step in order to achieve an annual capacity of 1,400 MT by October, 2008.

Regarding the expansion program, enhancement considers installation of additional facilities such as a conversion furnace, 2 distillation towers and a reduction furnace, as well as effi ciency improvements of recovery process, machining process and ancillary facilities

Annual capacity of polycrystalline silicon currently amounts to approximately 1,300 MT. Due to the facility expansion program, Osaka Titanium Technologies is targeting to achieve 1,400 MT of annualized polysilicon capacity by 2008 and following years.

Production, Capacity and Polysilicon Long-term Contracts (only for polycrystalline silicon)





Key Financial Information (only for Semiconductor Related Products and Energy Related Products Business)

Revenue amounted to ¥9,366 million for 2006, an increase of 24.4 percent over 2005. Polycrystalline silicon sales grew substantially thanks to increased annual capacity from 900 MT to 1,300 MT and due to rising sales prices as a result of demand growth for the material in solar cells and semiconductors industries.

The company has concluded new contracts for polyscrystalline silicon for FY2007 at improved sales prices over those for 2006. Moreover, Osaka expects substantial sales growth from increased shipments, thanks to the operation of facilities upgraded. As a consequence, net sales for FY2007 are estimated to increase 45.2 percent, to ¥13,600 million and operating income is expected to edge up 6.4 percent, to ¥3,700 million.

OSAKA Production (MT) Capacity (MT)2006 850 9002007 1,100 1,3002008e 1,350 1,4002009e 1,400 1,4002010e 1,400 1,4002011e 1,400 1,4002012e 1,400 1,400

200400600800

1,0001,2001,4001,6001,800

2006 2007 2008e 2009e 2010e 2011e 2012e

Capacity Production

-

2,500

5,000

7,500

10,000

12,500

15,000

2005 7,527

2006 9,366

2007 13,600

Grow th 45%

FY


Key Management and Ownership InformationBreak-down of Ownership

MASAAKI TACHIBANA PRESIDENT AND REPRESENTATIVE DIRECTOR

MUTSUO YAMAMOTO EXECUTIVE VICE PRESIDENT AND REPRESENTATIVE DIRECTOR

NAMEPOSITION

Source: www.osaka-ti.co.jp

nership





8.2 Current Technology

SILICIUM DE PROVENCEUSINE DE SAINT AUBAN04 600 SAINT AUBAN FRANCEPHONE: +33-0-492-337-596WWW.SILICIUMDEPROVENCE.COM

SILICIUM DE PROVENCE

SILICIUM DE PROVENCE, headquartered in France, is a company dedicated to the production of highly pure silicon for high power solar cells.

Silicium de Provence was founded in 2006 by Econcern, Photon Power Technologies and Norsun. The current shareholders of the company include SOL Holding (a joint venture formed between Econcern and SOLON), Photon Power Industries (a wholly owned subsidiary of Photon Power Technologies) and Norsun. These partners are bringing together a large industry network and a wealth of expertise in sustainable energy markets.

The company is constructing the fi rst polysilicon plant that will exclusively produce solar grade silicon for the photovoltaic (PV) industry. The high-quality polysilicon chunks can be used in any casting and wafering process


Silicium de Provence produces high quality polysilicon chunks that can be used in any casting and wafering process, leading to highest effi ciency solar cells.

In order to reduce technological risks, maximize purity levels and ensure the highest solar cell effi ciency, Silicium de Provence has selected the chemical vapor deposition process.


Facilities and Expansion Plans The Silicium de Provence plant is based in France (Chateau Arnoux / Saint Auban, Alpes-de-Haute-Provence district) on the site of a chemical plant run by Arkema.

The site was carefully selected mainly due to its proximity to a chlorine chemistry plant that supply purifi ed hydrogen chloride and hydrogen needed for the polysilicon production.

The total investment in the plant is expected to be around 300 million of euros.

According to management guidelines, with an initial annual capacitiy of more than 4,000 MT silicon, the fi rst plant is expected to be operational in 2010.

Production, Capacity and Polysilicon Long-term ContractsSt. Auban, aerial view of the site

AUBAN, FRANCE

2007: N/A2008: N/A



Production (MT)

Capacity (MT)

2010e 2,000 4,0002011e 4,000 4,0002012e 4,000 4,000





200

1,200

2,200

3,200

4,200

2010e 2011e 2012e

Capacity Production

Polysilicon Long-term ContractsCustomer Date

signedContract amount ($ mn)

Contract period

Evergreen Solar

Dec-07 NA 2010-2018

FRANK WOUTERS CEO

PHILIPPE VEYAN COO

FREDDIE MENCARELLI PROJECT LEADER

NAMEPOSITION Current shareholders of the company include SOL Holding

and Photon Power Industries. Break-down of ownership was not disclosed by the company.

Source: www.siliciumdeprovence.com, www. renewableenergyworld.com, www.streetinsider.com

(*) Consolidated Statement of Income for FY2007 is not disclosed by DCC Chemical



DCC50, SOGONG-DONG, JUNG-GU100-718 SEOUL , KOREAPHONE: +82-2-727-9500WWW.DCCHEM.CO.KR

DC CHEMICAL CO. (DCC)

DC CHEMICAL CO. (SEO: 010060), headquartered in Korea, is a chemical company that specializes in the areas of inorganic chemicals, fi ne chemicals, petro and coal chemicals as well as material processing. The Company was incorporated according to the Commercial Code of Korea on August 5, 1959, under its former name, Oriental Chemical Industries, to manufacture and sell soda ash and related products. In 1976, DC Chemical listed its common shares on the Korea Stock Exchange. On May 1, 2001, the company merged with Korea Steel Chemical Company and changed its name to DC Chemical Co., Ltd.

DC Chemical produces over 40 products, covering a wide range of chemicals in the areas of inorganic chemicals, petrochemicals and coal, and fi ne chemicals, including hydrogen peroxide, soda ash, sodium carbonate peroxyhydrate, fumed silica, carbon black, and pitch

DC Chemical is a multinational corporation with several plants in worldwide US, Canada, Brazil, Germany, the U.K., Italy, Spain, Hungary, China, the Philippines, and Korea.


INORGANIC CHEMICALS. DC Chemical supplies many of the inorganic chemical products such as sodium carbonate, peroxyhydrate, micloid, fumed silica and caustic soda needed to produce a wide range of essential goods in industries as glass, soap, food, paper and chemical manufacturing.

PETRO AND COAL CHEMICALS. DC Chemical blazed the way in the petro and coal chemicals industries by constructing a pioneering coal tar plant in 1976. These and other facilities expansions allow to construct a coal chemical complex, which produces chemical products by distilling byproducts from the process of iron making, such as coal tar and light oil. DC Chemical provides many of the conveniences of everyday life as well as core materials for such diverse industries as automotive, construction, electric, electronic and textile.

FINE CHEMICALS. DC Chemical produces an array of chemical reagents, agrochemicals and hexachlorophenes. Its also produces specialty reagents used in the semiconductor, organic synthesis and biochemistry fi elds, as well as reagents for general analytic purposes. Recently, it’s developed a range of top-quality medical ingredients to serve the rapidly growing pharmaceutical industry.

PVC WINDOW SYSTEMS. DC Chemical produces electronics components and chemicals used in the manufacture of polyvinyl chloride (PVC) window treatments. PVC window systems feature superior thermal insulation, soundproofi ng and heat shielding.

DC Chemical manufactures silicone through its subsidiary Dongyang Silicone Co. Ltd. In July 2005, DC Chemical acquired 100% of its equity to become sole owner. Located in Iksa, Korea, DongYang provides a diverse range of more than 4,000 products used in a cross section of general high-tech industries. Its plant is equipped with manufacturing facilities for rubber compounds, industrial and construction sealants and silicone fl uids and emulsions.


Facilities and Expansion Plans DC Chemical had invested total 400 billion won ($430 million) to build polysilicon production facility in Gunsan, Korea. Commenced in August 2006, plant construction and successful test run of high-purity solar-grade polysilicon were completed after 16 months with estimated production capacity of 5,000 MT per year. DC Chemical will sequentially go into partial operation from January 2008 and will commence into full-scale commercial production in Q2 of 2008.

GUNSAN, KORA(SIEMENS)2007: N/A

2008: 5,000 MT

DC CHEMICAL CO.



Production, Capacity and Polysilicon Long-term Contracts DC Chemical entered the polysilicon business in 2006. The company fi nished construction of its plant in late 2007 with estimated production capacity of 5,000 MT per year from 2008. Due to its expansion plans, the company plans to have an annual production capacity of 15,000 MT by 2009.

DC Chemical recently expanded its agreement with Evergreen Solar with greater delivery quantities beginning in CY09. The agreement with Deutsche Solar suggests that DC Chemical is confi dent to produce near its 3,700 MT capacity in 2009.

In October 2006, DC Chemical secured a long-term agreement with SunPower Corporation in the United States for the supply of polycrystalline silicon.

DC Chemical announced plans to invest approximately 700 billion won ($778 million) in new production capacity expansion, producing 10,000 MT of polysilicon in Gunsan Plant site. The construction of the new plant will begin in Q1 of 2008 while commercial production will begin in 1H of 2009. The company’s target customers are worldwide ingot/wafer, cell makers.

DC Chemical recently announced that it will sell polysilicon to wafer manufacturer Deutsche Solar, a subsidiary of SolarWorld AG over a 6 year period from 2009-2015. The agreement calls for $508M of polysilicon sold to Deutsche Solar over the six year span. No details were provided on the delivery schedule. At $80/Kg, the quantity sold would be 6,350 MT over the 6 years.

DC CHEMICAL Production (MT) Capacity (MT)2008e 2,500 5,0002009e 7,000 15,0002010e 15,000 15,0002011e 15,000 15,0002012e 15,000 15,000


0

3,500

7,000

10,500

14,000

17,500

2008e 2009e 2010e 2011e 2012e

Capacity Production



Contract period

SunPower Jul-06 250 2008-2012Changzhou Trina Solar Energy

Jan-07 121 2009-2015

Evergreen Solar Jan-08 231 2008-2014Deutsche Solar Feb-08 482 2009-2015Yingli Green Energy

Feb-08 178 2009-2013

Motech Industries Mar-08 164 2009-2015Sino-American Silicon Products

Mar-08 244 2009-2016

Green Energy Technology

Mar-08 258 2009-2016

Suntech Power Mar-08 636 2009-2016Space Energy Corporation

Mar-08 165 2009-2015

CoMTec Solar Apr-08 156 2009-2015Wafer Works Apr-08 234 2009-2016DC Wafer Investments

Apr-08 147 2009-2018Based on KRW/US$ rate on April 22,2008



DCC Chemical achieved KRW 2,223 billion of sales during FY 2006, an increase of 32 percent y-o-y due to consistent sales increases, especially in its soda ash and sodium carbonate peroxyhydrate products.

Operating income was KRW 181 billion in FY2006, an increase of 22 percent y-o-y.

In 2006, DC Chemical entered the polycrystalline silicon business and secured stable demand by signing long-term supply agreements with SunPower Corporation in the United States and with Changzhou Trina Solar Energy in China.



LEE SOO YOUNG CHAIRMAN AND REPRESENTATIVE DIRECTOR

BAIK WOO SUG PRESIDENT AND REPRESENTATIVE DIRECTOR

NAMEPOSITION

Revenues (KRW Millions)

0450900

1350180022502700

2004 2000

2005 1,690

2006 2,223

FY


Source: www.dcchem.co.kr, Solar Industry Report



ISOFOTÓNMONTALBÁN, 928014 MADRID – SPAINPHONE: +34 91 414 78 00WWW.ISOFOTON.COM

ISOFOTÓN ET AL.

ISOFOTON, headquartered in Málaga, Spain, was established in 1981 to initiate the industrial manufacture of photovoltaic cells from silicon wafers, a project that was led by Professor Antonio Luque (Universidad Politécnica de Madrid). In 1985, the company consolidated the solar energy activities, by including the technology for manufacturing thermal collectors. Since then, it has offered Photovoltaic and Thermal solutions based on Solar Energy.

The Grupo Bergé´s acquired Isofoton in 1997. This acquisition boosted our commercial and production activities. Isofoton continues to be active in both fi elds.

Isofoton is present in over 60 countries. It has subsidiaries in America, Africa, Asia, and Europe that work on a local level in its areas of infl uence.


PHOTOVOLTAIC AREA. Within the Photovoltaic Area the production of cells is of special relevance, where Isofoton’s great technological capacity and power are upheld. With the manufacturing of modules, cells, trackers, inverters, regulators, lighting, batteries and pumping systems, Isofoton develops sustainable installations that are respectful of the Environment, as well as buildings that have a constructive and electricity-producing dual function, using architecturally integrated technology.

THERMAL AREA. Its productive process stands out for being one of the most effi cient and capable in the sector.


Facilities and Expansion Plans The building of the polysilicon plant in los Barrios, Cádiz, represents a way of Isofoton´s diversifi cation strategy, creating a presence in all links of the value chain, from the generation and self-suffi ciency of raw materials of high industrial value, to the commercialization of exclusive advanced technology products such as concentration cells and trackers.

Isofoton signed an agreement with Endesa and the Andalusian Government regarding the start-up of the polysilicon factory in Los Barrios, Cádiz in 2006. With the objective of producing polysilicon for the “Solar Sector”, ensuring the supply of this raw material at a competitive price on the market, Isofoton has driven the construction of a factory which, in its fi rst phase, with an investment of € 250 million, will produce polysilicon for the photovoltaic industry in Spain beginning in 2009. Isofoton contributes not only with capital for the new factory, but also technological leadership as experts in the sector.

LOS BARRIOS, CADIZ(SIEMENS)2007: N/A2008: N/A

ISOFOTÓN


The factory will have an annual production capacity of 2,500 MT from 2009 going forward.

No information available for Polysilicon Long-term Contracts

ISOFOTON Production (MT) Capacity (MT)2009e 2,500 2,5002010e 2,500 2,5002011e 2,500 2,5002012e 2,500 2,500

0

550

1,100

1,650

2,200

2,750

3,300

2009e 2010e 2011e 2012e

Production Capacity




Isofoton reported €176.4 million of operating profi t, a 19.3% increase y-o-y.

In 2006 funds increased by €3.6 million, that is, 10% compared to 2005. EBITDA reached €8 million, remaining level and stable with respect to previous fi scal years.



ÁLVARO YBARRA ZUBIRÍAEXECUTIVE CHAIRMAN

JOSÉ LUIS MANZANOCEO

NAMEPOSITION


Source: www.isofoton.com

Operating Profi t (€ million)

0

45

90

135

180

2004 2005 2006

The Grupo Bergé, through the Bergé Solar and Bergé and Cia S.A. companies, has been the major shareholder of Isofoton since 1997, together with the participation of other minority shareholders.



HOKU SCIENTIFIC, INC. OPAKAPAKA STREET 1075HI 96707-1887 KAPOLEIHAWAII, UNITED STATESPHONE: +1-808-682-7800WWW.HOKUSCIENTIFIC.COM

HOKU SCIENTIFIC, INC.

HOKU SCIENTIFIC (NASDAQ: HOKU), headquartered in the United States, is a materials science company focused on clean energy technologies. The Company was incorporated in Hawaii in March 2001, as Pacifi c Energy Group, Inc. In July 2001, the Company changed its name to Hoku Scientifi c, Inc. In August 2005, the Company went public listing on the NASDAQ Global Market.

The Company has historically focused its efforts on the design and development of fuel cell technologies. However in 2006 the company began to diversify their business in three units: Hoku Solar, Hoku Fuel Cells and Hoku Materials. Hoku Solar markets, sells and installs 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. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho.

In February and March 2007, the Company incorporated Hoku Materials Inc. and Hoku Solar Inc., respectively, as wholly owned subsidiaries to operate its polysilicon and solar businesses, respectively.


HOKU FUEL CELLS DIVISION. The division, which accounts for 51% of total net sales, develops and manufactures membrane electrode assemblies (MEA) and membranes for proton exchange membrane (PEM), fuel cells powered by hydrogen. Hoku MEAs are designed for the residential primary power, commercial back-up, and automotive hydrogen fuel cell markets.

HOKU SOLAR DIVISION. The division, which account for 49 percent of total net sales, offers photovoltaic system design, engineering, installation and post-sale service. Hoku Solar is Hawaii’s premiere solar company providing turnkey PV system installations for commercial and residential applications and is committed to maximizing renewable energy technologies in the State of Hawaii.

HOKU MATERIALS DIVISION. The division, which did not currently generate any revenue in FY2007, is in the process of constructing a polysilicon manufacturing plant with planned capacity of 2,000-3,000 MT per year, with customer shipments planned to begin in the fi rst half of calendar year 2009. Hoku Materials will utilize the Siemens reactor process to produce polysilicon. As regards its customers, Hoku Materials has already fi xed polysilicon supply agreements with Sanyo ($377 M), Suntech ($678 M) and Solar-Fabrik ($185 M). The company plans to begin its shipments in the fi rst half of 2009.


Facilities and Expansion Plans In February 2007, in order to ensure an adequate supply of polysilicon for Hoku Solar’s modules, Hoku Scientifi c incorporated Hoku Materials to produce this key material for consumption by Hoku Solar and for sale to the larger solar market.

In January 2008, Hoku Materials entered into an agreement with Bank of Hawaii to purchase in increments an aggregate amount of up to 8.7 million Euros on various maturity dates beginning in April 2008 and ending in July 2010 at a fi xed U.S dollar amount of $12.8 million. Hoku Materials expects to partially use the Euros to purchase hydrogen reduction and hydrogenation reactors for the production of polysilicon.

Hoku Scientifi c Chairman and CEO Dustin Shindo,

and Idaho Gov. C.L. “Butch” Otter, joined local and

state offi cials in a ceremonial groundbreaking.



Production, Capacity and Polysilicon Long-term Contracts (only for Hoku Materials Division)

The Company commenced construction of its planned polysilicon production facility in May 2007 and expects signifi cant additional capacity to come on-line in 2009, before its planned production of polysilicon will begin. Hoku Scientifi c intends to fi nance the construction of this facility through a combination of prepayments from customers and debt and/or equity fi nancing.

Initially, the company expects to produce 2,000 to 3,000 MT of polysilicon per year. However, in June 2007 and due to signed polysilicon supply agreements, the company plans to increase the size of its polysilicon production facility by up additional 1,000 MT of annual capacity. Consequently, the company plans to have an annual capacity of 3,000 MT by 2012.

IDAHO, US(SIEMENS)2007: N/A2008: N/A

HOKU SCIENTIFIC

HOKU SCIENTIFIC Production (MT)

Capacity (MT)

2009e 50 1002010e 250 4002011e 575 7502012e 1,875 3,000

Capacity of Polysilicon (MT)

0300600900

1,2001,5001,8002,1002,4002,7003,000

2009e 2010e 2011e 2012e

Capacity Production



Contract period

Suntech Power

Jun-07 678 2009-2018

Solar-Fabrik Jun-07 185 2009-2015Solarfun Power

Nov-07 306 2009-2016

SANYO Electronic

Jan-08 530 2009-2018

Hoku Materials did not generate any revenues either in FY2007 or 3Q08, as the company is at an early stage of the construction of its polysilicon facility.

Key Financial Information (only for Hoku Materials Division)





DUSTIN M. SHINDO CHAIRMAN, PRESIDENT AND CEO

KARL M. TAFT III CTO

NAMEPOSITION

Source: www.hokuscientifi c.com, www.renewableenergyworld.com, Q-Series Global Solar Industry



M. SETEK CO., LTD.3-6-16, YANAKA110-0001 TAITO-KU,TOKYO JAPANPHONE: +081-33-824-3241WWW.MSETEK.COM

M. SETEK

M. SETEK Co., headquartered in Japan, provides monocrystal silicon wafers for photovoltaic energy systems. It also designs and manufactures semiconductor fabrication equipment renowned for high precision and reliability, as well as develops technologies of related processes many of which are based on environment-friendly techniques including the recycling of washing solutions and other materials.

M. Setek has overseas operational offi ces in Shanghai and Johannesburg; subsidiaries in Munich and the U.S., as well as production facilities in Beijing and Ningjin.

M. Setek is the world’s leader in recycling silicon scrap material for the solar sector. As regards its customers, Sanyo, Hitachi, BP Solar, and Bhel are considered among its major clients.


M. Setek began manufacturing monocrystal silicon wafers in 1984. Its monocrystal silicon wafers for photovoltaic cells offer considerably higher energy conversion effi ciency than conventional polycrystal types. As the largest Japanese manufacturer of monocrystal silicon wafers, M. Setek supplies their products and know-how to many international companies.

Since 1979, M. Setek has been developing and manufacturing a wide range of semiconductor production equipment such as automatic and semi-automatic coaters, scrubbers, and etching systems. M. Setek is also engaged in the development of wire sawing systems, which is an essential material to photovoltaic cell manufacture.


Facilities and Expansion Plans M. Setek has been working on setting up its 3,000 MT polysilicon manufacturing facility since middle 2006. On April 2007 the plant was offi cially opened. On December 2007 the company started its production of polysilicon at its Soma Japan factory, as the company could generate thrichlorosilane, needed to manufacture polysilicon.

M. Setek plans to have its plant fully operated, with 16 polysilicon reactors working, at the beginning of 2008.

The company may invest in second phase polysilicon plant although no specifi c plan has been worked out yet.

M. Setek Plant, Soma City, Fokushima, Japan

SOMA CITY, JAPAN(SIEMENS)

2007: 400 MT2008: 4.200 MT

M. SETEK



Production, Capacity and Polysilicon Long-term Contracts M. Setek expects to reach annual capacity of 400 MT by the end of 2007 and then increase its annual capacity in the following years.

M. Setek plans to ramp up its daily polysilicon output to 10 MT per day in 2008.




Contract period

SunPower NA 500 2007-2011

There is no fi nancial information disclosed for this Company, as it is a private company


M. SETEK Production (MT) Capacity (MT)2006 100 2002007 300 4002008e 1,350 4,2002009e 4,600 5,8002010e 6,850 10,0002011e 10,000 10,0002012e 10,000 10,000

0

2,500

5,000

7,500

10,000

12,500

2006 2007 2008e 2009e 2010e 2011e 2012e

Capacity Production



RITSUO MATSUMIYA PRESIDENT

KOSHI TOITA EXECUTIVE DIRECTOR

NAMEPOSITION

Source: www.msetek.com, www.renewableenergyworld.com, Q-Series Global Solar Industry, Solar Industry Report

M.Setek is a private company.



SCHEUTEN SOLARWORLD

In 2006 SCHEUTEN SOLAR has set up a joint venture together with SOLARWORLD AG under “Scheuten SolarWorld Solizium GmbH,” based in Freiberg, Germany to develop a production plant for metallurgical silicon manufacture. Both companies have a 50 percent interest in the joint venture which covers the development and construction of a production line with an annual capacity of at least 1,000 MT for producing extremely pure solar silicon by purifying metallurgical silicon. The earnings of joint venture are shown in the fi nancial statements of both companies with balance sheet recognition at equity.

SCHEUTEN SOLAR, headquartered in Netherlands, is a global operating, innovative and leading solar company that produce, design, and sell PV solar modules and total PV solar solutions. Scheuten Solar started actively researching solar energy in 1999 and has supplied products to the German market since 2003. The company has implemented a number of high profi le projects since 2003 that have allowed the company to establish itself and become a major player in the German solar market.

SOLARWORLD AG (SWV), headquartered in Bonn, Germany, manufactures and markets photovoltaic products worldwide by integrating all components of the solar value chain, from feedstock to module production, from trade with solar panels to the construction of solar power plants. The business operations are divided into four units: Wafer & Raw Materials, Cell, Module and Trading.

Products and Services (only for Scheuten SolarWorld Solizium GmbH)

The Joint Venture deals with the development and the construction of a production facility for high purity silicon from metallurgical silicon. Metallurgical silicon which can be gained from almost unlimited deposits has a degree of purity of about 98 percent that needs to be further refi ned for the purposes of the solar industry.


Facilities and Expansion Plans Construction of the plant started in 2007. In order to implement these new raw materials activities SolarWorld bought a plot of 20,000 square meters including administrative and laboratory buildings in the immediate vicinity of the existing SolarMaterial silicon recycling factory and the Solar Factory II in Saxony. As a consequence, existing synergies can be used to implement an economical technology for the production of solar silicon from metallurgical silicon.

SAXONY, GERMANY(MG TO SOG)

2007: CONSTRUCTION2008: CONSTRUCTION

SCHEUTEN SOLARWORLD SOLIZIUM

SOLARWORLD AGKURT-SCHUMACHER-STR.12-14NO 53113 BONNGERMANYPHONE: +49-228-559-20-0WWW.SOLARWORLD.DE

SCHEUTEN SOLARGROETHOFSTRAAT 21 5916 PA VENLOPOSTBUS 22, 5900 AA VENLONETHERLANDSPHONE: +31 (0) 77-3599-222WWW.SCHEUTENSOLAR.COM

Production, Capacity and Polysilicon Long-term Contracts According to SolarWorld guidance, the plant will have a 500 MT capacity in 2009 and 1,000 MT in 2010.

According to Solizium CEO, Peter Woditsch, the Joint Venture will start commercial production in 2010.

No information is available for Polysilicon Long-term Contracts.

Scheuten Solarworld Solizium

Production (MT) Capacity (MT)

2009e 500 5002010e 750 1,0002011e 1,000 1,0002012e 1,000 1,000

200

450

700

950

1,200

2009e 2010e 2011e 2012e

Capacity Production





PETER WODITSCH CEO– DEUTSCHE SOLAR

NAMEPOSITION

Source: www.solarworld.de, www.scheutensolar.com



LDK SOLAR CO., INC.HI-TECH INDUSTRIAL PARK 338032 XINYU CITY JIANGUIPEOPLE’S REPUBLIC OF CHINA PHONE: +86790-686-0171WWW.LDKSOLAR.COM

LDK SOLAR CO., LTD

LDK SOLAR CO., LTD (NYSE: LDK), headquartered in China, is a manufacturer of multicrystalline solar wafers, which are the principal raw material used to produce solar cells. LDK sells multicrystalline wafers globally to manufacturers of photovoltaic products, including solar cells and solar modules. In addition, the company provides wafer processing services to monocrystalline and multicrystalline solar cell and module manufacturers. LDK’s headquarters and manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi province in the People’s Republic of China. The company’s offi ce in the United States is located in Sunnyvale, California.

LDK has Strategic relationships with world class PV equipment manufacturers GTSolar (USA) HCT (Switzerland), support LDK on equipment, process and technology.


LDK manufactures and sells multicrystalline solar wafers. The Company currently produces and sells multicrystalline wafers in two principal sizes of 125 mm by 125 mm and 156 mm by 156 mm, with thicknesses from 180 microns and 240 microns.

The Company also provides wafering services to both monocrystalline and multicrystalline solar cell and module manufactures, which provide LDK their own ingots to be sliced and it charges a fee based on the number of wafers to be sliced. The main technological process of multi-crystalline wafers contains: ingot and wire saw.

LDK purchased the most advanced process and system with great amount of expense – the most important contract on solar equipment manufacture, to produce solar grade multicrystalline ingot and wafer. Advanced technology, low energy consumption, low cost results LDK hold the great market competitive. Nowadays, LDK products have been ordered until 2008, wafer produced by LDK will ship to Suntech, Solarfun, CEEG, Motech and other famous photovoltaic companies in China, as well as export to the U.S., Japan, Canada, etc., into international photovoltaic market.


Facilities and Expansion Plans LDK manufacturing plant is located in Hi-Tech Industrial Park, Xinyu, Jiangxi, covers 700 unit of area, architecture area is more than 130,000 square meters, and over 3000 employees; LDK introduces international advanced equipment, technology and craftwork of solar multi-crystalline into the manufacture plant.

LDK is the biggest solar multi-crystalline ingot and multi-crystalline wafer production plant in Asia. The new offi ce building which invested for more than 20 million RMB will put into use in the near future.

The polysilicon production plant is located adjacent to LDK’s current solar wafer manufacturing facilities in Xinyu City, China. Polysilicon plant construction is on schedule to reach the company’s capacity goal up to 6,000 MT in 4Q08 and 15,000 MT in 2009.

Regarding polysilicon plant status, work started on concrete foundations of fi rst reactor building. Start of installation of support equipment for reactor building is scheduled for June 2008. LDK will purchase reactors and other equipment from GT and install it at its facilities with the intent of producing silicon feedstock for its



XINYU CITY, CHINA

2007: N/A2008: 6,000 MT

LDK

Production, Capacity and Polysilicon Long-term Contracts Upon completion of the polysilicon plant, LDK will have an annual capacity of 6,000 MT in 2008 and 15,000 MT in 2009.


LDK Production (MT) Capacity (MT)2008e 3,000 6,0002009e 10,500 15,0002010e 15,000 15,0002011e 15,000 15,0002012e 15,000 15,000

multicrystalline solar wafers.

According to LDK, the LDK Polysilicon Project continues to proceed on schedule. Plans include continuing interaction with the technology know how providers with emphasis on timely completion of their deliverables and expediting specifi cations for the long delivery items. Process plans to issue all remaining equipment data sheets and specifi cations. Model reviews were held for the Polysilicon areas.


0

3,000

6,000

9,000

12,000

15,000

18,000

2008e 2009e 2010e 2011e 2012e

Capacity Production

Net sales for 4Q07 were $192.8 million, up 21.4 percent sequentially from $158.7 million for 3Q07, and up 212 percent y-o-y from $61.9 million for 4Q06

Gross profi t margin for 4Q07 was 30.1 percent compared with 30.8 percent in 3Q07 and 42.9 percent in 4Q06

Key Financial Information Key Management and Ownership Information


Source: www.ldkdolar.com, Q-Series Global Solar Industry

0

30

60

90

120

150

180

2006 12 32 62

2007 73 99 159 193

Grow th 719% 404% 211%

1Q 2Q 3Q 4Q

Revenues ($ millions)

(*) The company made its fi rst commercial ship-ment of solar wafers in April 2006


XIAOFENG PENG CHAIRMAN AND CEO

LIANGBAO ZHU DIRECTOR AND EXECUTIVE VICE PRESIDENT

NAMEPOSITION



OTHER CHINESE COMPANIES

With many of the top Chinese and Taiwanese cell manufacturers having aggressive expansion plans, polysilicon production within the region is an important consideration. China is on course to raise its output of polysilicon to 25 percent of world production in 2010. Coupled with capacity coming on line, world production is set to climb to 163,000 MT in 2010. But, China’s polysilicon ambitions are part of a broader plan to ensure that 15 percent of the country’s energy comes from renewable by 2020, with a government commitment to invest almost $200 bn.

In order to develop the capacity to fi ll its polysilicon demand, China will need to overcome several obstacles:

a) Poor manufacturing technology. The most effi cient polysilicon manufacturing technology is based on Siemens’ methods, but China vendors use inferior technology processes, leading to energy consumption of two to three times international standards.

b) Small scale manufacturing. The ideal economy of scale for polysilicon manufacturing is 2,500 tons per year and the minimum economy of scale is 1,000 tons per year.

The major challenge of China’s solar energy and information technology industries is developing polysilicon manufacturing technology. The major international polysilicon manufacturers who monopolize the advanced technology required for polysilicon production have not been willing to transfer production technology to China. As a result, China polysilicon manufacturers have been forced to invest in developing their own production technologies. Nevertheless, several Chinese companies have begun investing in polysilicon production technology and capacity expansion.


Emei Semiconductor, located in Mt. Emei, is one of the fi rst batches of enterprises specializing in semiconductor materials in China. Equipped with a strong technical capacity, the plant & institute boasts a legion of engineers experienced and knowledgeable in search and production of semiconductor materials as well as leading production facilities and modern management mode. It was accredited with ISO9002 quality certifi cation in 2002. Not only does it produce semiconductor silicon materials, highly pure metal & alloy products, organic silicon and silicon tetrachloride, but it is engaged in export business. As one of the largest semiconductor materials and highly pure metal suppliers in China, it commends a big portion of domestic market shares; in addition its products catch on quickly in the U.K., France, the U.S., Japan, ROK, Singapore, Taiwan, and HK, which are widely applicable to discrete devices, integrated circuit, and electrical and electronic parts.

CSG Holdings’ core business since its inception in 1984 has been glass manufacturing. In 1992, it became one of the fi rst Chinese companies to list on the Shenzhen Stock Exchange. The company manufactures raw sheets of high-grade fl oat glass, new-typed electronic components and structure ceramic materials. CSG also operates in real state development.


Facilities and Expansion Plans Main emerging Chinese producers include:

a) Emei Semiconductor is the oldest established Chinese polysilicon producer, with 400 MT of production capacity in 2007. Emei is expanding its capacity to 4,800 MT by 2010.

b) CSG Holdings (China Southern Glass) plans to eventually build polysilicon facility with 4,000-5,000 MT of annual capacity. It is possible that the plant could come online by mid-2008. The process that CSG will be using to produce polysilicon is based on technology developed at Russian Research Institute.



CHINA(SIEMENS)

2007: 1,570 MT2008: 2,760 MT

KRISTALL CJSC


Despite China’s move to boost domestic polysilicon supply, neither international nor domestic experts think this will be enough to alleviate the supply constraint in the Chinese market, because the country has not yet mastered advanced silicon technologies. Meanwhile, major Chinese players are shifting to the offensive, expanding efforts to prove that they can indeed output targets to match growing global demand and enhance profi tability, primarily through strategic supply agreements and future growth in China’s domestic production of quality polysilicon.

Company representatives are predicting that the polysilicon shortages will ease in 2008. Domestic Chinese providers are expected to enter the market strongly in 2009.

Experts predict that, if all of currently planned projects come to fruition, annual production in China could be over 20,000 MT within the next three to fi ve years.

c) Luoyang China Silicon, the largest polysilicon producer in China with a production capacity of 500 MT in 2007, expanding to 3,000 MT by 2011.

d) Sichuan Xinguang started producing polysilicon in 2007 and had 200 MT of capacitiy. By 2009, the company plans to ramp to 1,260 MT. It has signed long-term polysilicon supply contracts with Yingli Green Energy for 100 percent of its production capacity.

e) Aostar, Luoyang, and Shangxin Silicon are in construction phase and will come online by 2008. Additionally, other polysilicon projects are currently under way in China. We will examine them through the report.

CHINESE COMPANIES

Production (MT)

Capacity (MT)

2006 310 6202007 1,095 1,5702008e 2,165 2,7602009e 3,810 4,8602010e 7,710 10,5602011e 10,560 10,5602012e 10,560 10,560

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

2006 2007e 2008e 2009e 2010e 2011e 2012e

Emei CSG Luoyang China Silicon Sichuan Xinguang

Production of Polysilicon (MT)

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,000

2006 2007e 2008e 2009e 2010e 2011e 2012e

Emei CSG Luoyang China Silicon Sichuan Xinguang


No further information available for Polysilicon Long-term Contracts.

Source: THT Research, Q-Series Global Solar Industry



CHINESE POLYSILICON

China is expected to become a key player in the Polysilicon industry. The planned capacity of the Chinese Polysilicon Projects, combined with that of the already developed projects, could drive China to become one of the top producers worldwide.

However, since many of these projects are in early planning stages, whether they will actually start operations is still uncertain.

In our estimates, we will only consider 20 percent of potential production and capacity of these Chinese Polysilicon Projects. For further detail, please refer to Section 6 of the report.

Business and Project Description

PROJECT LOCATION DESCRIPTIONAsia Silicon Xining, Qinghai The company is building a polysilicon plant in Qinghai, China. It signed a

seven-year contract worth US$ 1.5 bn with Wuxi, China-based Suntech Power Holdings (NYSE: STP) to provide delivery of a volume range of polysilicon each year at fi xed prices, using a take-or-pay approach, with delivery beginning in the second half of 2008. Asia Silicon expects to be a low-cost producer of polysilicon, enabling it to sell polysilicon to Suntech Power at contract prices below US$ 40 per kg towards the end of the seven-year contract.

Jiangsu Shunda Yangzhou, Jiangsu Shunda PV-Tech Co. Ltd. is a sino-foreign joint venture company, largely owned by Jiangsu Shunda Semiconductor Co. Ltd. As a high-technology company, it focuses on the photovoltaic market.

Jiangsu Zhongneng Xuzhou, Jiangsu Jiangsu Zhongneng’s polysilicon program was established on July 18, 2007 and started production the following September. In January 2007, Solarfun Power Holdings Co. (an established manufacturer of photovoltaic cells, modules, and ingots in China) announced a decrease in expectations for polysilicon supply from Jiangsu Zhongneng.

Aixin Silicon Qujin, Yunnan The project is funded by Yunnan Aixin Silicon Sci-Tech Co. Ltd. with a total CNY 10 bn, of which CNY 2.5 bn is being used for the fi rst phase that kicked off in April 2007. This is the largest highly-pure polycrystalline silicon production project in Asia. It is located in Nanhaizi Industrial Park in the Qujin county of the Yunnan province.

Tongwei Group, Jiangsu Juxing Group, and Leshan Municipal Government

Leshan, Sichuan Tongwei Group, Jiangsu Juxing Group, and Leshan Municipal Government signed a contract in May 2007 to construct a polycrystalline silicon project. This project will be completed in three phases and will require an investment of CNY 5 bn.

Shanxi Tianhong Silicon

Xianyang, Shanxi Shanxi Tianhong Silicon Material Co. signed an investment contract in July 2007 with the Xianyang government to produce polysilicon. The total investment for the project is CNY 5.2 bn, and the polysilicon production capacity will be over 10,000 tons.



DALU Polysilicon Hohhot, Inner Mongolian Autonomous Region

DALU Polysilicon Co. Ltd. is a business unit of DALU Group (a private high-tech enterprise group involved in high-tech industries including power system measurement and control, environmental protection, information technology, and biotechnology). The company will build a polysilicon plant that will produce high-purity electronic grade polycrystalline silicon material that can be used in both electronic and photovoltaic applications. It announced that it has signed letters of intent with Poly Plant Project (PPP), Silicon Chemical Corp. (SCC), and CH2M HILL Lockwood Greene. PPP and SCC will cooperate to provide advanced process technology for the project. CH2M HILL Lockwood Greene will provide engineering design, project management, and related services for DALU Polysilicon’s production plant.

PROJECT LOCATION DESCRIPTIONZhongjing Huaye Solar Polysilicon

Baotou, Inner Mongolian Autonomous Region

The Beijing Zhongjing Huaye Technology Co. Ltd. is a state-owned import and export company under the China National Arts & Crafts (Group) Corp. The project has a total investment of CNY 1.23 bn and is located in the Baotou Rare Earth High-Tech Zone. It will produce polycrystalline silicon and monocrystal silicon for solar energy use.

Shenzhou Silicon Inner Mongolian Autonomous Region

The Inner Mongolia Shenzhou Silicon Project’s total investment is expected to reach CNY 1.8 bn. The project will be completed by the end of 2008.

Jinhua Smelting Linghai, Liaoning Jinhua Smelting Co. Ltd., founded in August 1996, is a national enterprise focused in industrial silicon production and multi-region management of mining, smelting, etc. The company sells its products to Korea, Japan, U.S.A, Holland, Australia, Hong Kong, and Taiwan via the ports of Jinzhou, Dalian, Yingkou, and Tianjin.

Jiangsu Daquan Group

Chongqing Municipality

Jiangsu Daquan Group launched a polycrystalline silicon base project in the Wanzhou Salt Chemical Industry Park in Chongqing. The project has a total investment of CNY 4.0 bn and is expected to kick off in 2008.

Sichuan Xinguang Silicon

Leshan, Sichuan Sichuan Xinguang Silicon Co. Ltd. was founded in October 2000. In January 2008, Sichuan Chuantou Energy Co., Ltd. (SHSE: 600674) gained approval to acquire a 38.9 percent stake in the company, valued at CNY 383.7 mn, from Sichuan Provincial Investment Group Co. Ltd., the current controlling shareholder of Xinguang Silicon. The National Development and Reform Commission, the nation’s macro-economy regulator, has granted Xinguang Silicon regulatory approval for its polysilicon project.

JPID Jiangsu Jiangsu Photovoltaic Industry Development Co, Ltd. (JPID) is a subsidiary of Hong Kong’s Golden Concord Holdings Ltd. The group’s integrated operations focus principally on the electrical generation sector and comprise traditional power and renewable energy development. They include investment and fi nancing, power engineering design, and plant construction. Recently, Golden Concord decided to enter polysilicon manufacturing, to expand its operations across the energy sector. In March 2007, JPID signed a long-term material supply contract with Solar EnerTech Corp. (OTC BB:SOEN.OB) for providing polysilicon refi ned as semiconductor-grade material.



Facilities and Expansion PlansAsia Silicon The new Qinghai plant has polysilicon production

capacity targets of 2,000 MT by July 2008 and over 6,000 MT by the end of 2010. The polysilicon plant will utilize the low-risk, well-proven trichlorosilane-based advanced Siemens production process. Up to 80% of the electricity used by Asia Silicon to produce polysilicon will be hydropower generated, with a pricing structure that is among the lowest industrial electricity rates in China.

QINGHAI, CHINA(SIEMENS)

2007: CONSTRUCTION2008: 2,000 MT

ASIA SILICON

Jangsu Shunda In June 2007, GT Solar announced that it signed a US$ 39.5 mn contract to sell polysilicon reactors and converters to Jiangsu Shunda. The company is expected to have a polysilicon production capacity of 1,500 MT by 2010.

Jiangsu Zhongneng Jiangsu Zhongneng Technical Co. Ltd. is investing CNY 7 bn in its polysilicon program and plans to achieve production capacity of 1500 MT.

Aixin Silicon The polycrystalline silicon capacity will reach 3,000 MT after the completion of the fi rst phase project and reach 10,000 MT in three years.

Tongwei Group, Jiangsu Juxing Group and Leshan Municipal Government

The project is designed to have a capacity of 10,000 MT of polycrystalline silicon. It will be constructed in three phases. The fi rst phase will have a capacity of 1,000 MT of polycrystalline silicon and is expected to start production in June 2008. The construction of the second phase, with a capacity of 6,000 MT polycrystalline silicon, is expected to start in July 2008 and end in December 2009. The third phase will have the remaining capacity of 3,000 MT.

Shanxi Tianhong Silicon The total polysilicon production capacity is planned to exceed 10,000 MT. The fi rst phase of the project will produce 3,750 MT of polysilicon per year.

Dalu Polysilicon DALU Polysilicon will build an 18,000 MT polysilicon plant. Plans call for phased construction, starting with an initial 2,500 MT.

Zhongjing Huaye Solar Polysilicon

The total investment is estimated to reach CNY 1.23 bn. The project will be completed by the end of 2010. Zhongjing Huaye will have an annual production capacity of 1,200 MT of polysilicon.

Shenzhou Silicon The capacity of the company’s project will be 1,500 MT by the end of 2008. Jinhua Smelting At Jinzhou, the company aims to create a photovoltaic

product center with a CNY 10 bn annual output. Projects such as Jinhua Smelting’s polysilicon plant will benefi t from the city’s preferential policies. The project is expected to have a capacity of 500 MT.

Jinhua Smelting Co. Ltd. current facilities

Jiangsu Daquan Group The fi rst phase of the project will have a capacity of 1,500 MT. The planned capacity of the whole project is 6,000 MT.

Daquan Group’s polysilicon project opening ceremony. Wanzhou District, Chongqin, China. June 27, 2007.



Sichuan Xinguang Silicon

Sichuan Xinguang Silicon Co. has entered into a 1,232 MT polysilicon supply contract with Yingli Green Energy.

JPID JPID has provided information that shows it is well on its way towards becoming one of the largest polysilicon manufacturers in China, with a proposed capacity of 2,100 MT tons in 2008 and 5,100 MT in 2009.

CHINESE PROJECTS

Potential Production (MT)

Estimated Production (MT)

2007 650 1302008e 6,210 1,2422009e 18,760 3,752201e0 31,675 6,3352011e 38,150 7,6302012e 39,350 7,870


The potential production and capacitiy fi gures takes into account the company´s disclosures and recent news.

Our estimates for production and capacity consider that 20 percent of announced projects will take place. We believe our estimates are more conservative and realistic, given current market condicions.

Potential and Estimated Production (MT)

02,5005,0007,500

10,00012,50015,00017,50020,00022,50025,00027,50030,00032,50035,00037,50040,00042,500

2007 2008e 2009e 2010e 2011e 2012e

Potential Estimated

CHINESE PROJECTS

Potential Capacity (MT)

Estimated Capacity (MT)

2007 1,300 2602008e 11,120 2,2242009e 26,400 5,2802010e 36,950 7,3902011e 39,350 7,8702012e 39,350 7,870

Potential and Estimated Capacity (MT)

No further information available for Polysilicon Long-term Contracts.

02,5005,0007,500

10,00012,50015,00017,50020,00022,50025,00027,50030,00032,50035,00037,50040,00042,500

2007 2008e 2009e 2010e 2011e 2012e

Potential Estimated

Source: Q-Series Global Solar Industry, China Solar Energy Blog - Solar Polysilicon, Wafer, Cell, Module, PV System made in China, Cleantech, PV Status Report 2007 by European Commission’s Joint Research Centre, China National Chemical Information Center, China Solar PV Report 2007 by China Environmental Science Press



NITOL SOLARUSOLIE-SIBIRSKOEIRKUTSK REGION 665462,RUSSIA PHONE: +7-39543 5-71-01WWW.NITOLSOLAR.COM

NITOL SOLAR

NITOL SOLAR, headquartered in Russia, is an international, vertically integrated company whose main business activities are scientifi c development and manufacture of products used to generate solar energy.

In 2005 Nitol Group acquires Usolie Sibirskiy Silicon which, together with Usoliekhimprom, provides an integrated complex for manufacturing silicon-based products. In 2006 Nitol Solar is established, installing all the necessary equipment for the production of trichlorosilane, the raw material for producing polycrystalline silicon.

Nitol’s current and envisaged product groups include the value chain from raw materials (chlorine and hydrogen) to trichlorosilane and solar grade polycrystalline silicon.

Production is based in its factory at Usolie-Sibirskoe. Its products are sold to a range of international customers, principally in Europe and South-Eastern Asia.


Nitol Solar´s production activity is based on two divisions, both of them integrated into a single value chain.


Facilities and Expansion Plans Nitol Solar launched trichlorosilane production of solar industry grade in 2007, as well as construction of the polycrystalline silicon plant, project managed by Fluor Corporation.

Nitol Solar announced production of fi rst polysilicon at its manufacturing plant in Usolye-Sibirskoye on January 23. The successful start – up of the CVD reactor commenced on schedule following an 18 month construction programme. Its existing TCS production facilities and its 70-year heritage in the Russian chemical industry position let the company enter this new market well positioned. The company will produce polycrystalline silicon using the Siemens technology, which is based on the hydrogenous recombination of TCS.

Nitol Solar announced it has signed an agreement to supply solar grade polysilicon to Evergreen Solar, Inc., a US based global technology leader and innovator in the solar industry. Under the terms of the agreement, the Company will supply Evergreen with solar grade raw polysilicon during a six year period, commencing in 2009.

The company has signed an agreement to supply solar grade polysilicon to Suntech Power Holdings Co. during a seven-year period beginning in 2009. The agreement provides for the delivery of predetermined volumes of polysilicon each year at fi xed prices for the initial term, with market related price adjustments for later years.

The company also signed a fi ve-year agreement to supply Trina Solar with solar grade polysilicon to produce over 200MW of modules in aggregate. While delivery of polysilicon will start in 2009, Trina Solar will have the opportunity to purchase polysilicon in 2008 from a pool of unallocated production.

SIBIRSKOYE, RUSSIA

2007: N/A2008: N/A

USOLYE




The company plans to have a target production capacity of 3,600 MT of polysilicon in 2009.

NITOL SOLAR

Production (MT)

Capacity (MT)

2008e 300 1,2002009e 2,400 3,6002010e 3,600 3,6002011e 3,600 3,6002012e 3,600 3,600


0

550

1,100

1,650

2,200

2,750

3,300

3,850

2008e 2009e 2010e 2011e 2012e

Production CapacityPolysilicon Long-term ContractsCustomer Date


Contract period

Motech Industries

Sep-07 166 2009-2014

aSuntech Power

Nov-07 NA 2009-2015

Evergreen Solar

Jan-08 NA 2009-2014

There is no fi nancial information disclosed for this Company, as it is a private company




DMITRY KOTENKOCEO

MICHAEL KERSCHEN DIRECTOR FOR STRATEGIC DEVELOPMENT

NAMEPOSITION

Nitol Solar is a private company

Source: www.nitolsolar.com, Solar Industry Report



KRISTALL / RUSSIA AND FORMER SOVIET UNION COMPANIES

According to Dr. Lebedev of Swiss Wafers, Russia and countries of the Former Soviet Union have the potential to produce upwards of 14,500 MT provided the necessary investment funds are secured. He believes that it is likely that 3,000 MT of capacity will be online in this region by 2009. However, several drawbacks may prevent Former Soviet Union from growing, such as, breaks in technological network, absence of state politics concerning privatization of metallurgy facilities, low investment level, loss of internal market and low technical capital assets conditions.

The SiPro Silicon Program in Russia, spearheaded and run by the Russian Federal Atomic Energy Agency aims at creating a high tech manufacturing industry leveraging skilled workers displaced from nuclear weapons and spacecraft development, cheap electric power, and local resources and infrastructure. On January 1, 2006, the SSP Project was fi nanced with $120 Million (USD) to build out 1000 metric tons per year of solar grade polycrystalline silicon production capacity.


Kristall CJSC, located in Kyrgyzstan, is involved in the production of polysilicon, quartz crucibles, and trichlorosilane. For the past years the plant worked with halts, looking for large investments.

The Japanese business delegation visited Kyrgyzstan to negotiate for a start-up of polysilicon manufacturing facility during January 2008. Negotiations related to retrofi tting and resuming polysilicon production on the base of Kristall CJSC (Tash- Komur, Dzhalalabad Region). The Company may be transferred to state ownership.


Facilities and Expansion Plans Since the beginning of 2007, signifi cant progress has occurred in Russia/Commonwealth of Independent States on developing projects for polysilicon manufacturing. Currently, several polysilicon/feedstock manufacturing projects are under development in the Commonwealth of Independent States, including the following ones:

a) Solar Export – from 1,000 MT in 2009 to 2,500 MT per year onwards.

b) Russian Silicon – 3,000 MT per year starting in 2010.

c) Renova Orgsyntes (Renova Group) – 2,000 to 4,000 MT per year starting from 2009.

d) Baltic Silicon Valley – from 5,000 to 20,000 MT per year by 2012.

e) Zaporozhye – 3,000 MT per year starting from 2010.

f) Kazakhstan LGK – 5,000 MT per year

g) Kazakhstan TSK – 3,000 MT per year

h) Synthetic Technologies – 500 MT per year

The two major technology and equipment suppliers for all the above projects are GT Solar Incorporated, U.S. and SolMic, Germany.

SAXONY, GERMANY(SIEMEMS)

2007: 660 MT2008: 1,200 MT

KRISTALL CJSC




Kristall did not produce polysilicon in 2005 while its production in 2006 raised 60 MT. In 2007, the plant was acquired by Chinese Eastar Holding. The company’s goal is 1,200 MT by 2008.


Source: Semiconductor Equipment and Materials International SEMI®, guntherportfolio.blogspot.com, Lededev, Alex-ander, Revival of Polysilicon Production in Countries of the Former Soviet Union. 3rd Solar Silicon Conference, April 2006, Munich, Germany.

RUSSIAN AND SOVIET COMPANIES

Production (MT) Capacity (MT)

2006 30 602007 360 6602008e 930 1,2002009e 3,200 5,2002010e 8,950 12,7002011e 12,700 12,7002012e 14,700 17,200

02,0004,0006,0008,000

10,00012,00014,00016,00018,000

2006 2007e 2008e 2009e 2010e 2011e 2012e

Capacity Production




8.3 Alternative Technology

ELKEMHOFFSVEIEN 65 BNO 0303 OSLO,NORWAY PHONE: +47-22-45-01-00WWW.ELKEM.COM

ELKEM

ELKEM, headquartered in Norway, is a subsidiary of ORKLA ASA, the leading supplier of branded consumer goods to the Nordic grocery market. Elkem is one of the world’s leading companies for environment-friendly production of metals and materials. Its principal products are aluminum, energy, silicon metal, special alloys for the foundry industry, carbon and micro silica.

The company has production facilities in Europe, North and South America and Asia, as well as an extensive network of sales offi ces and agents covering the most important markets all over the world.

Elkem´s activities are organized in seven business units: Elkem Solar, Elkem Energy, Silicon, Foundry Products, Elkem Aluminium, Elkem Materials and Elkem Carbon.

On February 5th 2007, Elkem Solar entered into a major delivery contract with Q-Cells AG which, together with previous contracts, fi lls the factory’s capacity until 2018. The contract also includes an option for delivery of further volume from any new factories that Elkem Solar might decide to build.


ELKEM SOLAR. The division has spent more than 25 years developing a cost-effective metallurgical process for manufacturing high-purity silicon for the solar cell industry. The defi nite breakthrough for the innovation occurred in October 2006, when the company decided to build a new factory at the Elkem Fiskaa plant in Kristiansand, Norway.

ELKEM ENERGY. Elkem owns or leases 13 hydropower stations in Norway with an average output of three terawatt-hours (TWh). Together with its partners, the company administers roughly a third of the electricity consumed by Norway’s power-intensive industry. It is a major consumer and generator of power in Norway and one of the principal players in the Nordic electricity market.

SILICON. Elkem is one of the world’s largest producers of silicon. It delivers special products to customers in the chemicals, electronics and aluminum industries worldwide. Silicon from Elkem is alloyed with aluminum to produce cast aluminum parts, or can be processed by the chemicals sector to a number of products from sea lands, cosmetics and electrical insulation materials to lubricating oils and other synthetics used in car manufacturing. Elkem’s special Silgrain® product is utilized by polysilicon manufacturers as a raw material for further processing of silicon into electronic components such as semiconductors and solar cells.

FOUNDRY PRODUCTS. Elkem is the world’s largest supplier of ferrosilicon-based special alloys. Its customers for ferrosilicon include iron foundries and steel mills worldwide. Ferrosilicon from Elkem is used by the steel industry to produce carbon and stainless grades.

ELKEM ALUMINIUM. Elkem Aluminium is Norway’s second-largest producer of primary aluminum. The Elkem Aluminium Lista and Elkem Aluminium Mosjøen plants produce alloyed aluminum products in various formats. The Mosjøen plant makes special rolling labs and low iron foundry alloys, whilst the Lista plant produces extrusion billets and delivers liquid foundry alloys to the adjacent Alcoa Automotive Castings plant. Elkem Aluminium is a partnership owned 50/50 by Elkem and Alcoa.

ELKEM MATERIALS. Elkem Microsilica® is one of the principal products supplied by Elkem Materials. It fi nds a wide range of applications in high-strength concrete, other building materials such as roof tiles and facade cladding, and fi re proof products for heavy industry. Elkem Materials also produces Ceramite, a fi reproof material




Facilities and Expansion Plans The Orkla Board of Directors decided to

invest NOK 2.7 billion in building a new factory at the Elkem plant in Kristiansand, Norway to produce solar grade silicon in 2006. The solar project is based on new metallurgical process technology.

The facility is expected to start commercial shipments of silicon to the solar industry in mid 2008.

The company plans to have an annual production capacity of solar grade silicon of 5,000 MT in 2H08. A further 10,000 MT of capacity could be added in 2010, depending on market conditions.

The construction of the industrial plant was on schedule and continued to make good progress in 4Q07. Overall investments costs are expected to be previously announced, and start-up is expected towards 2H08.


KRISTIANSAND, NORWAY(MG TO SOG)

2007: N/A2008: 5,000 MT

ELKEM

ELKEM Production (MT)

Capacity (MT)

2008e 2,500 5,0002009e 5,000 5,0002010e 10,000 15,0002011e 15,000 15,0002012e 15,000 15,000

which is particularly heat resistant and hard wearing.

ELKEM CARBON. Carbon production takes place at Elkem Fiskaa in Norway, Carboindustrial and Carboderivados in Brazil, Elkem Carbon in China and Elkem Ferroveld JV in South Africa. The last of these is owned 50 percent. Elkem ranks as a leading producer of calcium carbide in the North American market.

Elkem Solar Plant Kristiansand, Norway


01,5003,0004,5006,0007,5009,000

10,50012,00013,50015,000

2008e 2009e 2010e 2011e 2012e

Capacity Production



Contract period

Q-Cells Feb-07 NA 2008-2018

Elkem’s fourth-quarter operating revenues totaled NOK 3,290 million, an increase of 34 percent over 4Q06.

Total revenues were NOK 10,293 million in 2007, up from NOK 9,180 million in 2006.

While the energy business reported satisfactory profi t in the fourth quarter of 2007, profi t from trading was signifi cantly lower than the strong fi gure recorded in the same period last year.

Due to higher recognized costs at Elkem Solar, the silicon-related units reported somewhat weaker overall profi t than in the fourth quarter of 2006. The market for silicon metal strengthened further in the fourth quarter while the market for ferrosilicon stabilized at the level in effect at the start of the quarter




Revenues (NOK million)

0

550

1100

1650

2200

2750

3300

2006 2193 2383 2143 2461

2007 2433 2351 2219 3290

Grow th 11% -1% 4% 34%

1Q 2Q 3Q 4Q



HELGE HOLEN PRESIDENT AND CEO

MORTEN VIGA SENIOR VICE PRESIDENT AND CFO

NAMEPOSITION

Elkem is a private company. In 2005, aluminum producer ALCOA sold its 47 percent interest in Elkem to ORKLA ASA, which has a 50 percent stake. Elkem delisted its publicly traded shares and is now a subsidiary of ORKLA.

Source: www.elkem.com, www.renewableenergyworld.com



JOINT SOLAR SILICON GMBH & CO.

In July 2006, SolarWorld announced that its joint venture with chemical giant Degussa – as of September 12, 2007, what was Degussa is now the Chemicals Business Area of the new Evonik Industries – for a polysilicon production process would proceed to commercial scale production. JOINT SOLAR SILICON GmbH & Co. KG (JSSI) is operating a plant, the product of which is carried at equity and shown in the fi nancial statements of SolarWorld AG and Degussa. As a consequence, SolarWorld will have access to high-grade solar silicon and secure a signifi cant portion of its future raw materials requirements for its international solar production. SolarWorld currently procures silicon from Wacker and Hemlock.

SOLARWORLD AG (SWV), headquartered in Bonn, Germany, manufactures and markets photovoltaic products worldwide by integrating all components of the solar value chain, from feedstock to module production, from trade with solar panels to the construction of solar power plants. The business operations are divided into four units: Wafer & Raw Materials, Cell, Module and Trading. SWV holds a 49 percent share in assets and earnings.

EVONIK DEGUSSA GmbH is a multinational chemistry corporation based in Düsseldorf, Germany which operates three divisions: specialty materials, consumer solutions and technology specialties. Since September 2007, the company resurfaced on the global stock market as part of Evonik. Degussa’s legal status was altered from a joint stock company (Degussa AG) to a limited liability company (Degussa GmbH). Degussa holds a 51 percent share in assets and earnings.

Products and Services (only for JSSI)

Degussa fi rst converts trichlorosilane into the intermediate monosilane, from which JSSI produces polycrystalline solar silicon in the subsequent step. Leading universities were also involved in the development of the new process. Thanks to integrated chlorosilane-AEROSIL® production, the Rheinfelden site is excellently suited for monosilane production.

Due to its low investment and low energy requirements, this production technology which produces solar silicon from silane shows substantial effi ciency advantages over the method of decomposing trichlorosilane.

In order to ensure the supply security of silane, SolarWorld AG concluded a long-term delivery contract with Degussa AG.


Facilities and Expansion Plans (only for JSSI) Following the start of construction of a pilot plant for solar silicon production in Rheinfelden last year, industrial-scale production of solar silicon will start up at the same site in 2008, initially with an annual capacity of 850 metric tons. The start of production will serve a considerable portion of other SolarWorld AG´s capacities.

The expansion of the solar silicon plant continues to proceed according to schedule. The fi rst reactor, which was started up with monosilane in the current in 2007, has an output capacity of around 10 MT of silicon in a marketable quality grade per month, used by SolarWorld AG in its wafer production.

In connection with the silicon activities of JSSI, SolarWorld AG signed an agreement with a bank on project fi nancing. The total volume of the long-term credit contracts is € 40 m. In order to secure supplies of raw materials for the solar-grade silicon production, € 20 m has been taken up by SolarWorld AG.

SOLARWORLD AGKURT-SCHUMACHER-STR.12-14NO 53113 BONNGERMANYPHONE: +49-228-559-20-0WWW.SOLARWORLD.DE

EVONIK DEGUSSA GMB.RELLINGHAUSER STRABE 1-11D-45128 ESSENGERMANY PHONE: +49-201-177-01WWW.DEGUSSA.COM

RHEINFELDEN, GERMANY(SILANE TO SOG)

2007: N/A2008: 850 MT

JSSI



Production, Capacity and Polysilicon Long-term Contracts (only for JSSI) Regarding solar silicon plant, activities of the pilot reactor are being extended. All fi ve tubes of the reactor were used in 2007. Starting in 2008, industrial production with four of these reactors will begin with an initial capacity of 850 MT in 2008, ramping up silicon capacity to 1,000 MT in 2009 and 2010.


JSSI Production (MT) Capacity (MT)2008e 425 8502009e 925 1,0002010e 1,000 1,0002011e 1,000 1,0002012e 1,000 1,000


0

250

500

750

1,000

1,250

1,500

2008e 2009e 2010e 2011e 2012e

Capacity Production



ARMIN MÜLLER MANAGING DIRECTOR – SOLARWORLD AG

NAMEPOSITION

Source: www.solarworld.de,Q-Series Global Solar Industry, www.degussa.com



JFE STEEL CORPORATION2-2-3 UCHISAIWAICHO TOKYOJAPANPHONE: +81-33-59-73-111WWW.JFE-STEEL.CO.JP/EN/

JFE STEEL CORPORATION

JFE STEEL CORPORATION, headquartered in Japan, was founded in 2003 by JFE Holdings, Inc., focusing in steel products and the development of new technologies in Japan and internationally.

JFE Steel Corporation produces and sells a wide range of high-value-added products: steel sheets, steel plates, steel shapes, steel pipes, electrical steel, stainless steel, bars, wire rods and welding materials, iron powder, and solar cell material. JFE has also developed many distinct recycling technologies, including systems to use waste plastics as blast furnace feed.

JFE Steel Corporation has one of the largest steel research center in the global steel industry and three main production centers: two large coastal steelworks in eastern and western Japan, and the Chita Works, which specializes in the production of pipes and tubes. The company also has technical research centers at both steelworks and at the Chita Works for the development and application of the most advanced steelmaking technologies in the world.


STEEL SHEETS. JFE produces a wide variety of steel sheets, including hot-rolled sheets made by hot rolling slabs, cold-rolled sheets made by cold rolling hot-rolled sheets, galvanized sheets and tinplate. High-quality sheets from JFE Steel are used throughout the automotive, electrical appliance, construction materials, offi ce equipment, container and packaging industries.

STEEL PLATES. JFE sells plates that are used in a wide range of applications, including shipbuilding, construction and bridge building, boilers, pressure vessels and industrial machinery. The titanium plates are used extensively in the aerospace industry for their lightweight and high corrosion resistant properties. They are also used in the chemicals, thermal and nuclear power generation, desalination and maritime development fi elds.

STEEL SHAPES. JFE steel shapes provide H-shapes (wide fl ange beams), sheet piles and other steel shapes that are used as structural materials in buildings, bridges, shore levees and many other applications. Spiral pipes are a type of steel pipe used as a foundation material in areas such as civil engineering and construction, pipe sheet piles and offshore structures.

STEEL PIPES. JFE produces steel pipes that are used in gas and water systems, buildings, civil engineering projects and a variety of other fi elds. JFE also supports the world’s energy industry with highly functional oil country tubular goods (OCTGs), line pipes and boiler tubes that are able to stand up to severe environments.

ELECTRICAL STEEL. JFE offers a full lineup of electrical steel sheets. It produces both grain-oriented and non-oriented electrical steel sheets as well as high-frequency “Super Core” products that contribute substantially to the solution of environmental and energy issues facing the 21st century.

STAINLESS STEEL. JFE produces a comprehensive lineup of stainless products comprising both sheets and plates that meet the complex needs of today’s society. JFE is one of the world’s top fi rms in ferrite products

BARS, WIRE RODS AND WELDING MATERIALS. JFE Steel produces a full lineup of high-quality bars and wire rods for use in automobiles, machinery and bearings. Its welding materials also enjoy a strong reputation for quality.

IRON POWDER. JFE also produces iron powder for warm packs, welding rods, gas cutting, deoxidizers and chemical reactions. These iron powder products are highly regarded in a wide range of industries.

SOLAR CELL MATERIAL. JFE is actively involved in the development of solar cell material, a product that is expected to be in high demand as a solution to the environmental and energy concerns of the future




Facilities and Expansion Plans In July 2006, JFE Steel announced that it started construction of a 100 MT solar grade silicon plant and also began designing a plant to mass produce the material. With help from NEDO (New Energy and Industrial Technology Development Organization), JFE Steel launched an R&D project in 2001 to develop solar grade silicon from metallurgical grade silicon.

JFE is actually involved in the research and develop of solar cell material in the JFE Steel Research Center. The center is responsible for developing innovative processing technologies and new products that capitalize on the potentials and possibilities offered by new materials. It also contributes its technology and expertise to related areas, such as chemicals and environment. The center has research laboratories in Chiba, Keihin,

TOKYO, JAPAN(MG TO SOG)

2007: N/A2008: N/A

JFE STEEL

Production, Capacity and Polysilicon Long-term Contracts The company plans to have an annual production capacity of solar grade silicon of 100 MT in 2009 and is targeting to achieve 400 MT in the following years.


JFE STEEL Production (MT) Capacity (MT)2009e 50 1002010e 150 2002011e 300 4002012e 400 400


HAJIME BADA PRESIDENT AND CEO

TAKASHI SEKITA VICE PRESIDENT

NAMEPOSITION

Source: www.jfe-steel.co.jp/en/ , Bloomberg, Q-Series Global Solar Industry


0

100

200

300

400

500

2009e 2010e 2011e 2012e

Production Capacity

Key Financial Information JFE STEEL did not generate any revenues either in FY2007 or 3Q08, as the company is at an early developing stage of solar grade silicon

nership

stry



FASANENSTRASSE 28D -10719 BERLINGERMANYPHONE:+49-30-889-2495-20WWW.SOLARVALUE.COM

SOLARVALUE AG

SOLARVALUE AG (XETR: SV7), headquartered in Berlin, Germany, was formed in June 2005 by Solarvalue Holding GmbH with an initial capital of € 1,050,000.and has been listed on the stock exchange since September 2006. The short-term goal of the company is to become a global, independent supplier of solar silicon in the expanding solar industry while in the medium to long term, the company aims to grow an integrated photovoltaic group covering the entire value chain of the solar industry.

In October 2007, Berlin-based Solarvalue AG closed a participation agreement with Moser Baer Photovoltaic Ltd. (MBPV), under which both contractual partners jointly conduct the business activities of Solarvalue. The participation provides MBPV long-term access to high-value solar grade silicon at competitive prices and supports Solarvalue AG in establishing the planned production capacities in Ruse, Slovenia.

In November 2007, Solarvalue AG signed a R&D agreement with and Sunways AG, Konstanz. This agreement envisages a close cooperation in R&D, aiming to produce marketable solar cells using solar grade silicon, made on the basis of metallurgical silicon. Sunways AG reputed pioneer company in the photovoltaic’s market. Its core competence is the development and production of integrated photovoltaic’s solutions and products like solar cells, inverters, solar modules and systems for power generation through solar energy


Solarvalue AG aims to establish itself as a global, independent supplier of raw materials to the expanding solar industry. Solarvalue is currently focused on producing solar grade silicon at its developing production site in Ruse/Slovenia while in the long-term the company aims to develop activities throughout the value chain.

Solar silicon is obtained by reducing quartz (silicon dioxide) with carbon in an electric arc furnace. Silicon is melted and mixed with slag and treated with acids to remove impurities. The metallurgical process has the advantage of not only being more cost-effective than the Siemens process established on the market but also having no dangerous substances such as chloride. However, the purity achieved by this process is not as high as in chemical production. The silicon obtained in this way can not be used in microelectronics but it can be used in photovoltaic cells.

Solar grade silicon (SGS) is able to provide a p-type wafer material, meeting the requirements of the standard industry process. Casting of mc-Si ingots further modifi es the initial SGS impurity content. Simultaneous optimization of the ingot casting, wafer and cell process sequence will lead to the eventual establishment of SGS as a new option for the PV Industry.


Facilities and Expansion Plans Solarvalue has a plant site located in Ruse, Slovenia near Maribor at the border of Austria, covering more than 22 hectares. It started to establish the production facilities for manufacturing solar grade silicon (SGS) during 2007. The electric arc furnace, some buildings of the plant as well as land were purchased from the previous owner, TDR Metalurgija, at the end of June 2007. The previous lease agreement was terminated. Solarvalue is planning to convert part of the factory to produce solar grade silicon in the fi rst term of 2008, as it previously produced calcium and ferro-alloys.

The company could not meet the production launch date originally scheduled for the end of 2007. Unexpectedly long term negotiations with the former owner as well as replanning activities at the production facilities due to the measures taken to reduce technical risks at production launch were the reasons for the delay. Delivery of fi rst material from Ruse is now scheduled for 2H2008.

RUSE, SLOVENIA(MG TO SOG)

2007: N/A2008: 4,400 MT

SOLARVALUE



Production, Capacity and Polysilicon Long-term Contracts Solarvalue scheduled delivery of fi rst solar grade silicon from Ruse for 2H08, however, we are conservative in our estimates and take into account capacity from 2009 onwards. The company expects to have an annual capacity of 4,400 MT in 2009 and plans to increase annual capacity in the following years.


SOLARVALUE Production (MT) Capacity (MT)2009e 2,200 4,4002010e 4,850 5,3002011e 5,300 5,3002012e 5,300 5,300



CLAUDIA BOEHRINGER CEO

JULIO BRAGAGNOLO CTO

NAMEPOSITION

Source: www.solarvalue.com Bloomberg, Q-Series Global Solar Industry


Key Financial Information Solarvalue did not generate any revenues in 2007. The company expects to generate revenues during 1H08.

The fi rst SGS production line was developed parallel to the building activities in Ruse. The “fi rst silicon in” test run is scheduled for 3Q08. By the end of 2008 the line will be moved to a fi ve-shift operation. A laboratory line based on the same process was established in the U.S. for production of SGS for test purposes.

Solarvalue AG established Solarvalue Distribution GmbH in 2007, a wholly owned subsidiary, with the purpose of selling solar silicon.

0

1,500

3,000

4,500

6,000

2009e 2010e 2011e 2012e

Production Capacity



DOW CORNING CORP2200 W. SALZBURG RD 48686 - MIDLAND, MI USPHONE:+98-94-96-40-00 WWW.DOWCORNING.COM

DOW CORNING CORP.

DOW CORNING, headquartered in United States, began as a joint venture of chemical titan Dow and glass giant Corning in 1943. Dow Corning is equally owned by The Dow Chemical Company and Corning Inc.

Dow Corning produces more than 7,000 silicone-based products such as silicone sealants, adhesives, silicone mold-making rubbers, lubricants, release agents for cookware, sound-absorbing silicone, leather treatment, skin care lotion, preceramic polymers for high temperature applications, liquid silicone dry-cleaning solvent, and silicone waxes. With more than 25 manufacturing sites and about 15 R&D centers worldwide, the company sells more than half of its products outside the United States.

Dow Corning has been providing materials to the photovoltaic industry throughout the company’s history, and it created the Solar Solutions Group in 2001 to focus on development and commercialization of material solutions that will improve cost effectiveness, material availability, durability and performance of photovoltaic devices.

Dow Corning produces polycrystalline silicon at its joint venture, Hemlock Semiconductor Corporation (HSC), a leading silicon feedstock supplier to the semiconductor and solar photovoltaic industries.


Dow Corning Solar Solutions Group provides materials and services for the entire photovoltaic supply chain, from sand to sun™: from the basic building blocks of silicon feedstock for ingots and wafers production to solar module frame assembly and sealing materials. It is leveraging its unique position and global leadership in the silicon value chain to deliver solutions that will make a difference in the photovoltaic industry and help photovoltaic producers fulfi ll the mid- and long-term promises of solar energy.

Dow Corning believes its new solar-grade silicon (SoG) offers a unique solution to the problem of silicon shortage in the PV industry. The product, called PV 1101, derives from the purifi cation of metallurgical silicon, and is used in a blend with purer silicon to manufacture fl at plate silicon solar cells. Dow Corning is supplying a few PV companies with the product to test the new material in their own production processes. The undisclosed companies have blended PV 1101 into their silicon feedstock at ratios of 10 percent or more.


Facilities and Expansion Plans The Dow Corning Solar Solutions Group has achieved a milestone in solar energy technology: a solar-grade (SoG) silicon derived from metallurgical silicon that exhibits good solar cell performance characteristics when blended with traditional polysilicon feedstock. This new silicon feedstock material, Dow Corning PV 1101 SoG Silicon, is the fi rst commercially available feedstock produced from such technology using large scale manufacturing processes dedicated to the photovoltaic industry.

Dow Corning began bulk production of PV 1101 as well as bulk customer shipments of in 2006. PV 1101 SoG silicon is the fi rst product manufactured at Dow Corning Solar Solutions Group’s new production facility in Brazil.

As regards new technology ventures, Dow Corning has a heavy stake in the nanotechnology of materials, as one long-used nanomaterial is silica. Silica is used in poly (dimethylsiloxane) -or PMDS – elastomers as a very effective network reinforcement.SAO PAULO, BRAZIL

(MG TO SOG)2007: 3,000 MT2008: 3,000 MT

DOW CORNING

Production facility in Brazil



Production, Capacity and Polysilicon Long-term Contracts Dow Corning production capacity of PV 1101 in 2006 was around 1,000 MT. However, the company could ramp up to large scale production quickly in response to demand. Dow Corning is producing the product exclusively at its new facility in Santos Dumont, Brazil. In the short term, only current Dow Corning customers can purchase the limited quantities of PV 1101 available. While the availability of public information on this new product is limited, it appears that this product could serve to add feedstock to the currently tight global silicon supply.


STEPHANIE BURNS CHAIRMAN, PRESIDENT AND CEO

JOSEPH SHEETS VICE PRESIDENT AND CFO

NAMEPOSITION

Source: www.dowcorning.com, www.roboticsonline.com, Bloomberg, Q-Series Global Solar Industry, Hoovers

Key Financial Information Revenue amounted to $ 4,943 million for 2007, an increase of

13 percent over 2006. Net income was $690 million for 2007, an increase of 15 percent over 2006.

Figures for 4Q07 include $167.1 million in net consolidated income and an 11 percent increase in sales to $1,294 million.

Dow Corning Do Brazil Ltda., private company headquartered in Sao Paulo, reported revenues of $33.7 million in 2006.

DOW CORNING Production (MT) Capacity (MT)2006 500 1,0002007 2,000 3,0002008e 3,000 3,0002009e 4,750 6,5002010e 8,250 10,0002011e 12,500 15,0002012e 15,000 15,000


0

2,500

5,000

7,500

10,000

12,500

15,000

2006 2007 2008e 2009e 2010e 2011e 2012e

Production Capacity



Contract period

ATS Autimation Tooling System

Apr-07 NA 2007-2012

Revenues ($ million)

0250500

7501,0001,250

2005 983 1,007 946 943

2006 1,027 1,062 1,141 1,162

2007 1,178 1,231 1,239 1,294

Grow th 15% 16% 9% 11%

1Q 2Q 3Q 4Q



BECANCOUR SILICON INC.6500, RUE YVON-TRUDEAU G9H 2V8 BECANCOUR QUEBEC, CANADAPHONE: +51-47-44-80-08WWW.TIMMINCO.COM

BECANCOUR SILICON INC.

BECANCOUR SILICON, INC (BSI), headquartered in Canada, commenced operations in 1976 and is the newest greenfi eld facility for the production of silicon metal and ferrosilicon in North America. In September 2004, TIMMINCO LIMITED (TSX: TIM) acquired 100 percent of the shares of BSI in C$ 34 million. Timminco Limited is a world leader in the production and marketing of specialty magnesium, and engineered magnesium extrusions, silicon metal and specialty ferrosilicon, calcium and strontium alloys.

Timminco’s business activities are organized in three divisions: Silicon Division, Magnesium Division, and Aluminum Wheels Division. BSI operates the silicon division; its products are used mainly in the chemical, electronics, aluminum, iron and steel industries.

BSI has long-term contracts to deliver up to 6,000 MT of the silicon per year beginning in 2009 as well as a pipeline of prospective customers who have expressed interest in entering into long term commitments.


BSI operates the Corporation’s Silicon Business of Timminco and is one of North America’s largest producers of silicon metal and ferrosilicon using a lower- cost compound electrode process patented by the company, with production capacity of 50,000 MT per year. Silicon metal and ferrosilicon are produced from quartz using similar smelting processes. They can each be produced in different grades, primarily depending on the percentage of silicon in the product. Silicon metal generally has a silicon concentration of 98 percent or higher, while ferrosilicon generally has lower silicon concentrations and a higher iron content.

BSI also sells silica fumes and dross, each of which are non-hazardous byproducts from its manufacturing process. Silica fumes are extracted from dust collection systems from the emissions from the electric arc furnaces. Dross is generally collected from cleaning out the ladles from the manufacturing process.

BSI is currently able to produce solar grade silicon at a purity level of 99.999 percent, or “fi ve nines,” which is acceptable to its existing customers. The Company believes that it may be able to achieve a higher purity level, which could enhance the Company’s competitive advantage and may allow for increased selling prices and margins for its solar grade silicon business.


Facilities and Expansion Plans The Becancour plant, located approximately 125 km southwest of Quebec City, is a 60-acre facility with three electric arc furnaces for the production of silicon metal and ferrosilicon. It is one of North America’s largest producers of silicon metal and ferrosilicon. Its products are mainly used in the chemical, electronics, aluminum, iron and steel industries. Silicon metal and ferrosilicon are produced from quartz using a smelting process.

Timminco Ltd. announced in February of 2008 that will spend $65 million on a previously announced expansion by its subsidiary, Becancour Silicon, essentially doubling its capacity to produce solar-grade silicon. Funding of the project will be from current funds, deposits made by customers under long-term supply agreements deal to supply 4,400 MT of solar grade silicon over fi ve years to a maker of solar cells.

Ground breaking ceremony took place in August 2007, while fi rst line started-up on December 19, 2007. First line reached nominal capacity on January 7, 2008 and operates at 80 percent on average since January 3, 2008, which was the fi rst day of continuous operations. The company plans to have its second line in operation on

Beancour Plant



Production, Capacity and Polysilicon Long-term Contracts BSI is expanding its production facilities to raise capacity to produce solar grade silicon, from 300 MT per year to 3,600 MT/year with three lines in operation, each expected to yield at least 1,200 MT of annual capacity. The company anticipates will reach full production capacity by the end of fi rst quarter of 2008. BSI will need to have a capacity of 6,000 MT/year of solar grade silicon in 2009 to supply existing contracts.

On February 22nd 2008, Timminco´s Board of Directors approved capacity expansion plans for the production of solar grade silicon at its wholly owned subsidiary, BSI, at its location in Quebec. The expansion is expected to raise the total annual production capacity of its solar grade silicon facilities to 14,400 MT from 3,600 MT. The expansion is expected to have a capital cost of approximately $65 million and will be completed by mid 2009, on a schedule that will enable BSI to meet all current customer commitments.

In 2007 the Company secured long-term sales contracts with four solar cell manufacturers for the supply of up to 6,000 MT annually of solar grade silicon starting in 2009.


In the Silicon Group, sales for 3Q07 were $28.6 million compared to $28.1 million q-o-q, an increase of $0.5 million. For the nine months ended September 30, 2007, sales in the Silicon Group were $76.1 million compared to $72.0 million for the fi rst nine months of 2006. In 3Q07 and on a year to date basis, there has been an increase in the sales of silicon metal compared to the same periods in 2006. Sales of ferrosilicon and by-products decreased when compared to the third quarter of 2006. Sales of solar grade silicon from the Company’s prototype facility were 30 MT in 3Q07 and 56 MT year to date.

BSI Production (MT) Capacity (MT)2007 150 3002008e 1,950 3,6002009e 9,000 14,4002010e 14,400 14,4002011e 14,400 14,4002012e 14,400 14,400



Contract period

Q-Cells Mar-08 NA 2008-2009

February 2, 2008 and its third line is forecasted to start-up on late February.

BSI has four customers under 5 year, fi xed-price contracts, and four additional customers under P.O. for 2008 covering the remaining available production. Negotiations are being held with different customers for supply in 2009 and beyond. A total of 27 customers have tested the material and only three of them were not able to successfully use the material due to lack of polysilicon blending.

BEANCOUR, QUEBEC(MG TO SOG)

2007: 300 MT2008: 3,600 MT

BSI


0

2,500

5,000

7,500

10,000

12,500

15,000

2007 2008e 2009e 2010e 2011e 2012e

Capacity Production

Revenues ($ million)

05

101520253035

2005 26 25 26 25

2006 23 21 28 27

2007 23 24 29

Grow th 0.2% 17% 2%

1Q 2Q 3Q 4Q

(*) 2007 includes fi rst nine months revenues




RENÉ BOISVERTPRESIDENT AND CEO

LUCIEN GIGUERE CFO

NAMEPOSITION

Source: www.timminco.com Bloomberg, Q-Series Global Solar Industry, guntherportfolio.blogspot.com

BSI has been a wholly-owned subsidiary of Timminco Ltd. since 2004.



AE POLYSILICON100 PASSAIC AVE, SUITE 2. NJ 07928 CHATHAMUSPHONE: +1558-12-97-47WWW.AEPOLYSILICON.COM

AE POLYSILICON (AEP)

AE POLYSILICON, headquartered in Chatham, New Jersey, was established in 2006 to develop and commercialize polysilicon production using fl uidized bed reactors with trichlorosilane as feedstock gas. When compared to conventional Siemens technology, the key benefi ts to AE’s technology are lower energy consumption, higher throughput, lower capital expenditure per ton of capacity and environmentally friendly closed loop process.

Since it’s inception in 2006, AE has built a world class team that has extensive experience with fl uidized bed reactor chemical vapor deposition and with polysilicon production facility development, construction, and operations. Their process and product have the potential to advance downstream production effi ciency. AE will start to supply the solar energy industry with polysilicon in late 2008.


AE is developing a capital-effi cient and energy-effi cient manufacturing process for the production of polycrystalline feedstock from metallurgical-grade silicon that uses a closed-loop, trichlorosilane, and fl uidized-bed deposition reactor technology proprietary to AE together with patented technologies licensed from a third party. High purity polysilicon can be manufactured in two forms depending on the technology used for production. With its fl uidized bed reactor technology, polysilicon will be produced in granular form.


Facilities and Expansion Plans AE has purchased 20 acres of land, including 39,000 square-foot building. AEP will renovate the existing building for use as its global headquarters offi ces and begun construction of an open-air production facility on fi ve adjacent acres at Keystone Industrial Port Complex (KIPC) in Fairless Hills, Pennsylvania. AE selected the KIPC due to the strong infrastructure available at the brown-fi eld site, the attractive incentives offered by the Pennsylvania Commonwealth, the close proximity to vendors and engineering fi rms, and the availability of a skilled workforce.

The Bucks County Economic Development Corporation worked with the Governor’s Action Team and AE to secure a $1.92 million fi nancial package from the Department of Community and Economic Development that includes a $1.76 million loan through the Pennsylvania Industrial Development Authority, a $100,000 grant through the Opportunity Grant Program and $65,000 in customized job training funds. The company is eligible to apply for a $5.8 million loan through the Citizens Job Bank program, which offers low-interest loans to companies that commit to creating or expanding jobs in Pennsylvania.

AE has signed a seven-year supply agreement with Taiwanese solar-cell manufacturer Motech Industries. Under the supply agreement, polysilicon delivery from AE to Motech is expected to begin in 2009, and the annual delivery quantity will be up to 2,400 MT of silicon from 2008 to 2013. Motech and affi liates have simultaneously made an equity investment in AE, and have acquired certain additional equity investment and equity conversion rights that will afford Motech the opportunity to participate in AE business.

Keystone Industrial Port Complex

KEYSTONE, US(MG TO SOG)

2007: N/A2008: 1.500 MT

AE POLYSILICON



Production, Capacity and Polysilicon Long-term Contracts Regarding its polysilicon plant in Keystone Industrial Port Complex, AE expects to be full operated in late 2008 or 2009. The company plans to start commissioning in June 2008 and start production in August 2008.

AE plans to have the capacity to produce 1,500 MT of silicon per year in its fi rst phase during 2008, then by 2010 ramp up to 12,000 MT annually.


There is no fi nancial information disclosed for this company.

AEP Production (MT) Capacity (MT)2008e 750 1,5002009e 1,500 1,5002010e 6,750 12,0002011e 12,000 12,000



Contract period

Motech Industries

Dec-06 NA 008-2013


0

2,500

5,000

7,500

10,000

12,500

2008e 2009e 2010e 2011e 2012e

Capacity Production


DR. YORK TSUOPRESIDENT AND FOUNDER

NAMEPOSITION

Source: www.aepolysilicon.com, www.solarheadlines.com, www.motech.com.tw, guntherportfolio.blogspot.com

AE was founded by Dr. York Tsuo. AE recently closed its fi rst round of equity fi nancing from a syndicate of private and strategic investors, including Motech. It is currently in negotiation with several other prospective strategic partners and long-term customers.



8.4 Polysilcon Recyclers

ERSOL SILICON, INC. AVIADOR STREET 322NO 93011 CAMARILLOUNITED STATESPHONE: +805-388-8683WWW.SOLARSILICON.COM

ERSOL SILICON, INC.

ERSOL SILICON (Ersol) began operations in 1996 as Silicon Recycling Services, Inc. In 2006, Ersol became part of the Ersol Solar Energy AG Group, an international company headquartered in Germany with operations in Europe, North America an Asia, which produces and markets high-quality silicon-based photovoltaic products. The company’s facilities are located in Camarillo, California in the US and Beijing in China.

Ersol’s core business consists of the recycling of silicon scrap from molten waste and defective goods, by-products and waste products from the semiconductor and solar industry, as well as waste from the Group’s in-house ingot production. The processed silicon can then be used again for solar applications. The company also offers additional services to the PV and semiconductor industry.

Ersol is currently the world leader in silicon feedstock processing for the solar industry, with over 2,000 metric tons of silicon processed pot scrap in solar cells worldwide.


SILICON FOR SOLAR AND SEMICONDUCTOR APPLICATIONS.

• Intrinsic silicon (also referred to as “virgin” or “poly”). Intrinsic metal has not been doped for use in monocrystalline (ingots) or multicrystalline (casting) applications.

• Remelt silicon (also referred to as “tops & tails”). Remelt material is cut from monocrystalline rods produced during Cz process.

• Silicon from pot scrap: Pot scrap material is the residual silicon in the crucible after growing the crystal (monocrystalline growing process).

• Wafer: Silicon wafer

• Ingot sections: Ingot sections of least 100 mm.

METALLURGICAL GRADE SILICON.

• Low Res: Low Resistive (below 0.5 ohm cm2) of pot scrap and remelt.

• Small: Small sized material (90 %< 50g), with varied resistivity.

• Broken wafers

• Quartz/Silicon Mix: Very small pieces of quartz/silicon mix, used by metal smelters.

SUPPORT PRODUCTS. POLYsortTM and Recharge System.


Facilities and Expansion Plans In 1998, Ersol Silicon (previously known as Silicon Recycler Services –SRS-) moved into its current location in Camarillo, California. In 2004, six years later, the company opened an offi ce in Beijing and expanded its production capacity and sales in China.

The acquisition in 2006 of SRS by Ersol Solar Energy AG Group was an expansion plan itself. The purchase price was less than €23 million. With this wholly-owed new subsidiary, Ersol Solar Energy AG signifi cantly expanded the Ersol Group’s

Ersol Silicon Plant, Camarillo, US



value chain and obtained a mainstay of its silicon supply, particularly in 2006 and 2007.

Production, Capacity and Polysilicon Long-term Contracts In 2005, SRS provided 700 MT of silicon on the spot market, 99 percent of which was sold to the PV industry.

The 2006 capacity was approximately 2,000 MT, making Ersol Silicon the world leader in silicon feedstock processing for the solar industry.


Note that 1Q 2006 data refl ects revenues for the Silicon segment from February 24th to March 31st, due to the timing of the acquisition.

In the fi rst nine months of 2007, the Silicon segment had a turnover of €14.5 million and 27% or €3.9 million are revenues generated within the Group.

Figures show that the Silicon segment is benefi ting from a high global demand for its services.



ROBERT BUSHMAN PRESIDENT

ERIC BALDWIN DIRECTOR OF OPS & ENG

ROSA VIRNIG DIRECTOR OF FINANCE & HR

BENJAMIN JIA DIRECTOR OF ASIAN OPS

NAMEPOSITION

Ersol Silicon Inc., has been part of Ersol Energy AG since 2005

(*) 1Q 2006 data from Feb 24th to March 31st. (**) 4Q 2007 data was not yet reported.

0

2

4

6

8

10

2 0 06 2 8 4 3

2 0 07 6 4 5 0

G r ow th 19 9 % -4 9 % 30 % 0 %

1 Q 2Q 3 Q 4 Q

NA

NA

Revenues (€ million)

Source: www.solarsilicon.com, www.enf.cn, www.ersol.de, Company’s reports



RENESOLA LTD.BAOQUN ROAD 8 YAOZHUANG INDUS-TRIAL ZONE NO 314117 JIASHANCHINAPHONE: +86- 573- 8477-3058WWW.RENESOLA.COM

RENESOLA LTD. (SOL)

RENESOLA LTD, former Zhejiang Yuhui Solar Energy Source Co. Ltd., was founded in June 2005 and started recycling polysilicon in July 2005 in Zhejiang province, China. The company changed its name to ReneSola Ltd. in April 2006 and is based in Jiashan, China.

ReneSola is a leading chinese manufacturer of silicon-based ingots and wafers that go into producing photovoltaic solar cells and modules. The company operates through its subsidiaries: Zhejiang Yuhui; ReneSola American Inc.; ReneSola Singapore Pte Ltd.; ReneSola (Malaysia) SDN.BHD; Linzhou Zhongsheng Semiconductor Silicon Material Co., Ltd., and Sichuan ReneSola Silicon Material Co. Ltd.

The company is listed on both the Alternative Investment Market (AIM) of the London Stock Exchange since August 2006 (Ticker: SOLA.L) and the New York Stock Exchange (Ticker: SOL) since early 2008.

Products and Services ReneSola’s principal activity consists of manufacturing solar wafers (thin sheets of crystalline silicon material primarily made by slicing monocrystalline or multicrystalline ingots). The raw materials used in the production process are sourced mainly through recycling silicon, such as different types of part processed and broken wafers, pot scrap, ingot tops and tails and other off-cuts, from the semiconductor industry and increasingly, the PV industry.

The recycling process begins with testing and sorting of reclaimable silicon raw materials based on their technical properties. Employees hand-sort the scrap material for recycling by testing their resistivity and self-developed solvent is also used to quickly categorize different kind of reclaimable silicon raw material. Once test and sorted, impurities are removed through mechanical grinding, chemical etching and ultrasonic cleaning.


Facilities and Expansion Plans (only for recylcing division) In September 2007, the construction of a new recycling facility in Malaysia was completed. The new Malaysian facility is expected to provide an annualized recycling capacity of 1,000 tons and will complement the existing recycling capacity in Zhejiang. Management believes this new facility will further strengthen its recycling capacity and will bolster its continuing efforts to secure feedstock at competitive rates.

Production, Capacity and Polysilicon Long-term Contracts (only for recycling division)

ReneSola processes 960 to 1,200 MT of scrap wafer and polysilicon per year.

Key Financial Information There is no fi nancial information available for the recycling division, as recycled silicon obtained is mainly use as an input in the manufacturing process of solar wafers.


XIANSHOU LI CEO

CHARLES XIAOSHU BAI CFO

NAMEPOSITION

BINGHUA HUANGCTO

CHENG-HSIEN YEHCOO

Source: www.fi nanznachrichten.de, www.reuters.com, www.fi nance.yahoo.com, www.fi nanceasia.com, www.hoovers.com, www.renesola.com, Company’s report



SOLARWORLD AG12-14 KURT-SCHUMACHER-STRASSE NO 53113 BONN GERMANYPHONE: +49-228-55920470 WWW.SOLARWORLD.DE

SOLARWORLD AG (FRA:SWV)

SOLARWORLD AG (FRA: SWV), headquartered in Bonn (Germany), was founded in 1988 by Mr. Frank H. Asbeck. The company’s subsidiaries include SolarWorld Innovations, Sunicon, Deutsche Solar, Deutsche Cell and Solar Factory, among others.

SolarWorld is one of the leading solar companies worldwide and is engaged in the research and development, production and recycling along the entire solar value change.

SolarWorld divides its operations into 6 segments: i) Research and Development (technology, process and product development); ii) Raw Materials (production and processing of solar silicon); iii) Wafers (production of crystalline solar wafers); iv) Solar Cells (production of silicon-based solar cells for use in solar power modules); v) Modules (hook up of solar cells, placement of connection socket and framing for use in power generation); and vi) Trading (international distribution of SolarWorld modules and complete systems).

The company is listed in Dusseldorf Stock Exchange and other German Stock Exchanges since its IPO in 1999.

SolarWorld is the only company worldwide that offers a recycling service for crystalline silicon products at all stages of the value chain. The company’s leading position in recycling can be attributed to the early establishment of the business in 2001 and the worldwide increase in the volume of secondary raw materials.

Products and Services As an integrated group, SolarWorld offers a broad range of monocrystalline and polycrystalline solar power products, including modules, solar kits and large-scale plants. These products are sold under a diversity of company brands, such as Sunkits®, Energyroof®, Sunmodule®, among others.

The recycling of raw material in the Solar Material division is also offered to external clients.


Facilities and Expansion Plans (only for SolarMaterial division) The Solar Material division currently accounts for more than 20% of the raw material supplies of the group, due to the early expansion of the business unit and newly developed technologies.

After the introduction of new etching technology in 2007, the company has now a capacity of up to 1,200 MT per year. The current capacity will be further enhanced by the plans of building a recycling site in Hillsboro, U.S. by 2008, of similar characteristics to the one in Freigberg, Germany.

In line with the growth in capacity and demand, SolarWorld is also planning to signifi cantly expand its competitiveness by investing in technology and greater automation in the recycling process. The increase in profi tability is expected to have a cost-cutting of around 30 percent in the medium term and 50 percent in the long term.

Production, Capacity and Polysilicon Long-term Contracts (only for SolarMaterial division)

SolarMaterial business unit has up to 1,200 MT recycling capacity, compared to 2006´s capacity of around 800 MT.

Solar Cell factory of Deutsche Cell



Key Financial Information There is no fi nancial information available regarding the recycling division.



FRANK H. ASBECK CHAIRMAN AND CEO

PHILIPP KOECKE CFO

FRANK HENN CHIEF SALES OFFICER

BORIS KLEBENSBERGER COO

NAMEPOSITION

Source: www.renewableenergyworld.com, http://fi nance.google.com/fi nance, www.solarworld.de, Company’s reports



SOLAR-FABRIK AGMUNZINGER STR. 10 NO 79111 FREIBURGGERMANYPHONE: +49-(0)761-4000-0WWW.SOLAR-FABRIK.COM

SOLAR-FABRIK AG (FRA:SFX)

SOLAR-FABRIK AG (FRA: SFX), based in Freiburg, Germany, was founded in 1996 as a privately held company by Georg Salvamoser. The company is engaged in manufacturing and marketing of solar modules and system components for the generation of solar power.

The company operates through 7 subsidiaries, located in Germany, the British Virgin Islands, US, Malaysia, Singapore and India and is structured into 5 segments: solar power system, wafer, wafer preparation, elimination and cell production.

Solar-Fabrik is among the European leaders in solar technology with worldwide trade relations and strategic partners in Singapore, Malaysia, India and California.

The company’s product range includes solar modules, inverters, fastening systems for on-grid and off-grid applications. Solar-Fabrik also sells solar wafers that have been manufactured from reclaimed wafers from semiconductor industry. The main customers include retailers, manufacturers, original equipment manufacturers and solar power operators.

The company became stock market-listed after its IPO in July 2002.

Subsidiaries and Products Global Expertise Wafer Division Ltd. (GEWD) is silicon wafer procurement company based in Kuala Lumpur, Malaysia and is wholly owned by Solar-Fabrik AG. GEWD buys recyclable wafers from the semiconductor industry, opening up a new source of raw material previously unavailable to the solar power sector.

Solar-Fabrik Silicon Services Ltd. / Poseidon Solar-Services Ltd. Solar-Fabrik AG holds 80% of the shares of Solar-Fabrik Silicon Services Ltd. (formerly OJAS Energy Ltd.). Through its 100% owned subsidiary Poseidon Solar-Services Ltd. (Poseidon), based in Chennai, India, Solar-Fabrik Silicon Services Ltd. is an approved specialist in the area of recovering recyclable wafers. Poseidon uses a special mechanical and chemical procedure to process the wafer material and Solar-Fabrik uses wafers recovered by Poseidon to manufacture high-quality solar cells.

Solar Energy Power Pte. Ltd. (SEP) is a Singapore-based solar cell manufacturer of SEP turn raw wafers recovered by Poseidon into high-quality solar cells, ready for assembly into solar modules.

Solar-Fabrik AG is headquartered in Freiburg, Germany, where its two owned plants turn solar cells into top-quality solar modules. Solar-Fabrik also provides customers with system solutions based on carefully matched high-quality components.


Facilities and Expansion Plans (only for Poseidon Solar-Services Ltd.) The acquisition of 80 percent of Solar-Fabrik Silicon Services Ltd. (fomerly OJAS Energy Ltd.) by Solar-Fabrik AG in October 2006 was an expansion plan itself. Solar-Fabrik Silicon Services is the holding company of Poseidon Solar Services Ltd. Due to this acquisition, the Solar-Fabrik Group increased its presence in the value chain in the wafer preparation segment, which deals with the cleaning and processing of wafers reclaimed from the semiconductor industry.

Production and Capacity (only for wafer preparation segment)

There is no information disclosed for this Company.



Key Financial Information (only for wafer preparation segment) In late 2006, Solar-Fabrik acquired 80% of Solar-Fabrik Silicon Services, the major holder of Poseidon Solar Services. Therefore, data for the wafer preparation segment is available from 2007 on.

In the fi rst nine months of 2007, revenues in the wafer preparation segment accounted for €12.2 million.



CHRISTOPH PARADEIS CEO

DR. FREDDY GOH CTO

BURKHARD HOLDER CHIEF OFFICER INTERNATIONAL BUSINESS DEVELOPMENT

NAMEPOSITION

Source: www.renewableenergyworld.com, fi nance.google.com/fi nance, www.solarworld.de, Company’s reporeports

Revenues (€ million)

0 .0

1 .0

2 .0

3 .0

4 .0

5 .0

6 .0

2 0 07 2 .2 5 .6 4 .4 0

Q 1 Q 2 Q 3 Q 4

NA





8.5 New Silicon Producers

NEW SILICON PRODUCERS

New silicon producers are mostly located in North America and Eastern Asia. Two companies are located in Europe and one in Oceania (Australia). Companies’ primary businesses vary from engineering consultancy services to manufacturing of cement and building materials.


COMPANY LOCATION BUSINESS DESCRIPTIONJaco SolarSi China Jaco SolarSi Ltd, privately held and headquartered in FuJian,

China, is a professional silicon producer committed to provide a “Green Silicon” with higher performance and cost-effi ciency to boost the development of PV industry. The Company claims to be the fi rst to mass produce upgraded metallurgical silicon (UMGSi) in China.

Xián Lijing Electronic Technology and Co.

China Xi’an Lijing Electronic Technology Co. Ltd, founded in 1997 and headquartered in the “Western Silicon Valley” Xi’an High-tech Development Zone New Industrial Park in Shaanxi, China, is a joint-stock enterprise with 120 mn Yuan registered capital. The Company has been primarily engaged in the manufacturing and processing of semiconductor silicon material, and R&D of other crystals.

Topsil Semiconductor Materials A/S

Denmark Topsil, (XCSE:TPSL), headquartered in Frederikssund, Denmark, is a silicon manufacturer focused on manufacturing high purity silicon using leading edge fl oat zone technology. Topsil has more than 40 years’ experience in the silicon business and is a global player that primarily operates through direct sales, but also through agents in remote markets in the U.S., China, Taiwan, and Korea.

Yingli Solar China Yingli Green Energy Holding Company Limited, (NYSE:YGE, listed since June 2007), headquartered in Baoding, China, is one of the leading vertically integrated photovoltaic (PV) product manufacturers in China. Through the Company’s principal operating subsidiary, Baoding Tianwei Yingli New Energy Resources Co. Ltd., YGE designs, manufactures and sells PV modules and designs, assembles, sells and installs PV systems that are connected to an electricity transmission grid or those that operate on a stand-alone basis.

KCC Corp. Korea KCC Corporation (KSE:002380.KS), headquartered in Seoul, South Korea, was created out of the merger between Kumgang and Korea Chemical Co. The Company’s principal activities are manufacturing and production of cement and building materials. The Company announced in February 2008 that it plans to spend $320 bn won (US$339 mn) to build a plant for producing polysilicon.



PV Crystalox Solar Germany PV Crystalox Solar (XLON: PVCS) is an independent developer and producer of solar-grade silicon products. Established in 1982, the company pioneered the industrial production technology for multicrystalline silicon. In 2002, Crystalox and PV Silicon merged to integrate ingot and wafer production. The company has been continuously profi table since 2002.

Trina Solar China Trina Solar Limited (NYSE:TSL), founded in 1997 and headquartered in Jiangsu, China, is a leading integrated manufacturer of solar photovoltaic products from the production of ingots, wafers and cells to the assembly of PV modules. Trina sells and markets its products worldwide, including in a number of European countries, such as Germany, Spain and Italy.

Mosel – Vitelic Taiwan Mosel Vitelic Inc. (XTAI:2342TT); established in 1991 and headquartered in Hsinchu, Taiwan; is principally engaged in the distribution of commodity dynamic random access memories (DRAMs), as well as the provision of original equipment manufacturer (OEM) services for six-inch wafers. Mosel Vitelic entered the solar cell business in 2006. The Company delivers solar cell products for the world-wide markets through a solid foundation in research, development, manufacturing, and marketing.

Solartech Energy Taiwan Solartech Energy Corp; (TPO:3561), headquartered in Taoyuan, Taiwan, is principally engaged in the manufacture, wholesaling and retailing of solar cells and electronic materials. Solartech mainly offers mono-crystalline solar cells and multi-crystalline solar cells. The Company exports its products to Asia and Europe.

COMPANY PRODUCTS AND SERVICESJaco SolarSi Jaco SolarSi Ltd, produces Upgraded Metallurgical Silicon. The product is tailored

for CZ pulling of monocrystalline silicon or use in the casting/ heat transfer exchange process for multicrystalline ingot production. The Company is engaged in developing the second generation of SOLARSI product which will increase the blending ratio by 20 percent to 30 percent and the conversion effi ciency by 1 percent to 2 percent.

Xián Lijing Electronic Technology and Co.

Xi’an Lijing Electronic Technology Co. Ltd produces “φ5” — ”φ8” normal (CZ), magnetic fi eld (MCZ) and monocrystalline silicon ingot and silicon wafer. These products are mainly used in the production of integrated circuits, separate parts diode (triode), silicon controlled rectifi ers and solar cells, and widely applied in various fi elds such as electronic information, energy communication and household electronic appliance.


Topsil produces and sells monocrystalline fl oat-zone silicon for the semiconductor and photovoltaic markets. Its products include fl oat zone silicon, a semiconductor material used for the production of power electronics, RF/wireless communication electronics, MEMS devices, detector electronics, and solar cells; neutron transmutation doped silicon for power applications; high purity monocrystalline silicon primarily used for optoelectronic applications, including particle and radiation detection applications; HiRes silicon for GHz communication platforms; PV-FZ silicon material that acts as a substrate for solar cell modules; and HiTran for infrared applications, as well as MEMS wafers. The company also supplies Czochralski wafers that are used in discrete applications, EPI growth applications, and MEMS applications.




Yingli Solar Yingli Green Energy’s end-products include PV modules and PV systems in different sizes and power outputs. It sells PV modules under its own brand name, Yingli, to PV system integrators and distributors located in various markets around the world, including Germany, Spain, China and the United States. The Company also sells PV systems to mobile communications service providers in China for use across China. The Company’s products and services include the manufacture of polysilicon ingots and wafers, PV cells, PV modules and integrated PV systems, which encompass the entire PV industry value chain, with the manufacture of polysilicon feedstock being the only exception.


Jaco SolarSi The planned prodction will ramp up to 2,000 MT per annum in the 2nd half of 2008 from 1,000 MT in 2007.

CHINA (TECHNOLOGY N/A)

2007: 1,000 MT 2008: 2,000 MT

JACO SOLAR SI

Xián Lijing Electronic Technology and Co

The area of production plant occupies 9,000 square meters, including a polycrystalline processing workshop, a monocrytalline workshop, a slicing and grinding workshop and the testing center.

Xi’an Lijing Electronic Technologyplant at Xi’an High-tech Development Zone New Industrial Park


The head offi ce and plant of Topsil is situated in Frederikssund, Denmark, on the bank of Roskilde Fjord. The Company has sales offi ces in the U.S. and Japan, and agencies in Germany, China, Taiwan, Israel, and India.

Topsil’s Roskilde Fjord premisesYingli Solar Yingli is the largest integrated manufacturer in China. Its production, storage,

administrative, research and development facilities are located in an industrial park in Baoding, Hebei Province, China. The Company expects to triple its capacity from 2007 levels by 2009 through Yingli’s 3rd phase enlargement project. In February 2008, the Company announced that it has signed two polysilicon supply agreements with DC Chemical Co. Ltd, a leading Korean chemicals producer. Under the fi rst agreement, DC Chemical will supply polysilicon with a value of approximately US$27 mn to Yingli Green Energy in 2008. Under the second agreement, DC Chemical will supply polysilicon with a total value of approximately US$188 mn to Yingli Green Energy from 2009 to 2013.



KCC Corp. KCC plans to spend 320 bn won (US$339 mn) to build a plant for producing polysilicon between February 2008 and July 2010 in joint venture with Hyundai Heavy Industries Co. Ltd. The plant, when completed, will produce 3,000 tons of polysilicons annually. The Company closed a deal with U.S.-based Solar Power Industries, Inc. to supply 92.5 bn won (US$97.8 mn) worth of polysilicons by December 2013.

PV Crystalox Solar PV Crystalox is planning to build its own polysilicon production facility in Germany to provide an additional source of polysilicon feedstock. The Company expects the facility to commence operation in 2009 with an initial planned production volume of 900 MT in that year, rising to 1,800 MT in 2011.

PVCS’s planned Bitterfeld, Germany

plantTrina Solar With goals to secure visibility on supply, price, and quality of up to 50% of its long-

term polysilicon requirements, Trina Solar is advancing project planning and fi nancing to build and operate a multi-phased polysilicon production facility announced in the fourth quarter of 2007. The Company announced in March 2008, that it has signed an agreement with GT Solar Incorporated ("GT Solar") to purchase primary converter and reactor systems for its planned polysilicon production project for a total consideration of approximately US$49 mn.

Mosel – Vitelic Mosel Vitelic completed its Solar cell production line in 2007. The Company started to evaluate and prepare the installation of a second line which will begin production from 2008.

Hsinchu Plant, Mosel Vitelic

Solartech Energy Solartech plans to partner with other Taiwanese solar cell manufacturers and establish a new company which will construct a polysilicon plant in the U.S.

Nippon Steel Materials Nippon Steel Corporation materials reported in its ‘Annual Report 2007’ that construction is proceeding on schedule at the solar cell polycrystalline silicon factory of NS Solar Material Co. Ltd., which was established in 2006. Production is scheduled to start up later in 2007.

FUKUOKA, JAPAN (TECHNOLOGY N/A)

2007: N/A MT 2008: 480 MT

NS SOLAR MATERIAL COMPANY

Global PV Specialists Global PV Specialists expects to begin producing silicon specifi cally for its own customers. The technology it will use includes a unique approach with rice hulls as the feedstock material. Capacity is expected to be 2,000 MT by 2010.

GiraSolar GiraSolar recently patented its GiraSi method for silicon production. Currently the Company is in discussions with the few universities which master the specifi c environment and conditions required for further development.



Prime Solar Pty Limited Prime Solar has applied for non-refundable grants for setting up the Polysilicon and the Wafers manufacturing facilities in the Saxony-Anhalt State of Germany. The Company has received Letters of Eligibility for the projects for favorable fi scal incentives including non-refundable grants from the State Government of Saxon-Anhalt and the Federal Government of Germany.

For constructing the polysilicon plant, Prime Solar is in the process of appointing a well known U.S.-based large EPCM Firm. The Project design works will commence in early 2008 and Stage I will come into regular production from 2H09.

Prime Solar’s plant in Germany

Arise Arise announced in January 2008 that its Silicon Feedstock Mini Pilot Plant is now operational and that polysilicon has successfully been produced in the Silicon Refi ning Furnace (SiRF(TM)). The Mini Pilot Plant is located at the Company's Waterloo facility. The Company expects its pilot plant capacity to be 50 MT / year by 2009.

New head offi ce, R&D and distribution facility in Waterloo, Ontario, Canada

Production and Capacity

KCC Corp. will build a polysilicon plant in a joint venture with Hyundai Heavy Industries Co. Ltd. PV Trina Solar, Crystalox Solar, Solartech Energy and Prime Solar are also planning to build their own polysilicon facilities

Players such as Yingli Solar and Trina Solar are integrating vertically

GiraSolar is still in R&D stage while ARISE successfully completed its pilot plant

Production of Polysilicon (MT)

2,990

7,705

14,630

19,80520,780

-2,500

2,500

7,500

12,500

17,500

22,500

2008e 2009e 2010e 2011e 2012e

Y ear

Jaco SolarSi Xián Lijing Electronic Technology and Co. Topsil Semiconductor Materials A/SYingli Solar KCC Corp. PV Crystalox SolarTrina Solar Mosel – Vitelic Solartech EnergyNippon Steel Materials Global PV Specialists GiraSolarPrime Solar ARISE

Topsil, Yingli,TrinaSolar, Mosel, Solartech and Girasolar MT data N/A




4,980

10,430

18,83020,780 20,780

-2,500

2,500

7,500

12,500

17,500

22,500

2008e 2009e 2010e 2011e 2012e

Y ear

Jaco SolarSi Xián Lijing Electronic Technology and Co. Topsil Semiconductor Materials A/SYingli Solar KCC Corp. PV Crystalox SolarTrina Solar Mosel – Vitelic Solartech EnergyNippon Steel Materials Global PV Specialists GiraSolarPrime Solar ARISE

Source: Companies’ Websites, fi lings and presentations, Reuters, Businessweek, Q-Series Global Solar Industry, PV Status Report 2007 by European Commission’s Joint Research Centre

Topsil, Yingli,TrinaSolar, Mosel, Solartech and Girasolar MT data N/A



9 REFERENCES

This section relied on several sources: PV handbook, Elkem’s website, http://www.wafernet.com; http://www.1.

udel.edu/igert/pvcdrom/; http://en.wikipedia.org ; and personal communication with Dr. Giso Hahn of the

University of Konstanz.

http://periodic.lanl.gov/elements/14.html2.

EERE Solar Energies Technologies Program http://www.eere.energy.gov/ 3.

http://www.renewableenergyworld.com/rea/news/infocus/story?id=41508 4.

When Does Polysilicon Reach Equilibrium, Q-Series Global Solar Industry, 12 December 2007; http://miner-5.

als.usgs.gov/minerals/pubs/commodity/silicon/

http://www.tokuyama.co.jp/eng/products/chem/si/polysilicon.html 6.

Waernes, Raaness, and Overlid, “New Feedstock Materials” ECN7.

New feedstock materials.. Aud Wærnes, Ola Raaness and Eivind Øvrelid, SINTEF Materials and Chemistry 8.

http://www.ecn.nl/docs/library/report/2005/rx05022.pdf

Analyst silicon fi eld trip. REC, March 28, 2007 http://hugin.info/136555/R/1115224/203491.pdf9.



New feedstock materials. Aud Wærnes, Ola Raaness and Eivind Øvrelid, SINTEF Materials and Chemistry 12.


14th Workshop on Crystalline Silicon Solar Cells & Modules: Materials and Processes. National Renewable 13.

Energy Laboratory August http://www.nrel.gov/docs/fy05osti/36923.pdf

New feedstock materials. Aud Wærnes, Ola Raaness and Eivind Øvrelid, SINTEF Materials and Chemistry 14.


Company website: http://www.lxecorp.com15.

Company website: http://www.airproducts.com16.

http://www.pv-tech.org17.

Company website: http://www.recgroup.com18.

Company website: http://www.airliquide.com19.

Company website: http://www.praxair.com20.

This subsection relied on several sources: Q-Series Global Solar Industry (12/12/2007), REC 2006 Annual 21.

Report, PV Technology, Performance and Costs.

Wacker Chemie AG 2007 Annual Report.22.

REC 4Q 2007 Quarterly Report.23.

DC Chemical 2006 Annual Report.24.

http://investors.jasolar.com25.

http://www.solarbuzz.com/News/NewsEUCO526.htm26.

ReneSola 4Q 2007 Annual Report.27.

Prometheus Institute, PV News 2007.28.

This subsection relied on several sources: PV handbook, Elkem’s website and EERE Solar Energies Tech-29.

nologies Program www1.eere.energy.gov/

http://www.topsil.com/130.

http://www.evergreensolar.com/app/en/home/31.

This subsection relied on: Paul Maycock, Travis Bradford. “PV Technology, Performance, and Cost,” 2007 32.

Update, Prometheus Institute.

http://www.cgs-gmbh.de/default_e.htm33.

http://www.gigamat.com/34.

This subsection relied on: Paul Maycock, Travis Bradford. “PV Technology, Performance, and Cost,” 2007 35.

Update, Prometheus Institute

Calyon Securites, Don’t Look to China for Poly Relief Anytime Soon…”. March 31st,2008.36.

Polysilicon prices, costs, and capacity by UBS: Q-Series Global Solar Industry, 12 December 2007 37.

http://www.solarbuzz.com/news/NewsASTE15.htm38.

This subsection relied on http://www.greentechmedia.com/articles/thin-fi lm-solar-production-to-leap-for-39.

ward-271.html and http://www.greentechmedia.com/assets/pdfs/executivesummaries/ExecSummRT.pdf



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