Neo Solar Power Sealed a 7 Year Wafer Supply Contract with REC Worth $442 Million
29 September 2008
Neo Solar Power (NSP), a manufacturer of high quality solar cells, announced it sealed a 7 year long term wafer supply contract with REC ScanWafer AS, said to be the world's largest manufacturer of multicrystalline silicon wafers. Under the contract, REC will provide NSP solar wafers worth of $442 million (NT$13 billion) for the period from January 1, 2009 to December 31, 2015. Adding REC to its well diversified wafer supplier base, NSP expects to further lower supply concentration risk.
NSP said it has strived to optimize wafer sourcing mix to not only achieve most favorable terms on sourcing costs, wafer quality, and on schedule deliveries but also avoid procurement concentration risk. Concluding wafer supply contract with REC is expected to extend existing cooperation relations and further solidify wafer supply security to supports growth of NSP for the coming years.
According to NSP, resolving this contract indicates a major milestone for the company on sourcing negotiation and effectively improves wafer cost mix to achieve financially rewarding terms. While improving wafer sourcing availability, NSP also advanced order flows and has signed several long term sales contracts, including the first 5 year solar cell contract with global leading module makers in Taiwan.
Benefitted from the long term contract terms, where volume increases quarter by quarter while price decreases quarter by quarter, NSP expects a multiple growth on financial performance in 2H08 compared to that in 1H08. Supported by strong future orders advancement and an encouraging solar industry growth momentum, the company is confident to further enhance financial performance. The Board of Taiwan Stock Exchange had approved NSP’s listing application on September 16, 2008 and NSP is expected to be listed on the main before the end of 2008.
