Hoku Materials Inc. has amended its polysilicon supply contract with SANYO Electric Co. Ltd. to increase the term of the contract from seven to 10 years. Total amounts that may be payable to Hoku Materials under the contract have increased from up to approximately $371 million for the seven-year contract to up to approximately $530 million for the amended 10-year contract.
Hoku Materials and SANYO also agreed to extend to May 31, 2008, the date on which either party may terminate the supply agreement if Hoku Materials is unable to complete the financing for its polysilicon production plant. The amendment also extends the dates when SANYO may terminate the agreement if Hoku Materials is unable to complete the various polysilicon production, testing, process implementation and shipment milestones.
Hoku Materials will start shipments to SANYO by the beginning of 2010, but the agreement provides that the company may ship product to SANYO in 2009.