Hoku, GEC in new polysilicon reactor contract

Kapolei, Hawaii-based Hoku Scientific (Nasdaq: HOKU) said its polysilicon supply unit signed a new polysilicon reactor supply contract with GEC, Graeber Engineering Consultants.

The company said the contract gives its Hoku Materials subsidiary the option to purchase additional polysilicon reactors for the production of up to 8,000 metric tons of polysilicon per year.

Financial terms of the deal were not disclosed.

Shares of the company were trading essentially flat today on the news.

Under an existing supply contract with GEC, Hoku Materials has ordered reactors to produce 2,000 metric tons of polysilicon per year, with an option to purchase reactors for an additional 500 metric tons.

"This additional contract with GEC gives us the flexibility to expand our production capacity at a predicable cost and with a guaranteed reactor delivery schedule," said Dustin Shindo, CEO of Hoku Scientific.

"While our ability to expand our facility depends on the volume of our potential future customer contracts, this agreement enables us to scale our polysilicon reactor capacity up to 8,000 metric tons per year, which we believe is possible on our existing 67 acre property in Pocatello, Idaho."

With the new agreement, Hoku Materials said it has an option to order reactors at any time over a twelve month period at predetermined pricing and delivery terms.

The company plans to start shipments of polysilicon from the Pocatello plant in the first half of 2009.

Hoku has become a signficant silicon supplier since entering the business just over a year ago. Browse our coverage of the company here.

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