Hoku Scientific, Inc. (NASDAQ: HOKU), a designer, developer and manufacturer of hydrocarbon-based membranes and membrane electrode assemblies (MEAs) for proton exchange membrane (PEM) fuel cells, announced it plans to diversify its product offerings by manufacturing and selling solar modules, in addition to manufacturing polysilicon, a key material used in the production of solar modules.
Hoku anticipates the costs to establish such facilities will be approximately $250 million, which the company will seek to fund through the issuance of debt and from potential customers’ cash down payments for future supply of polysilicon and modules. Hoku will explore basing these manufacturing operations in Singapore.
“Our plans to enter the solar power market represents the logical extension of our business as a provider of clean energy technologies, and complements our core fuel cell business,” said Dustin Shindo, chairman of the board of directors, president and chief executive officer of Hoku Scientific. “However, while the market for fuel cell products is still emerging, the solar market is already a rapidly growing industry. One of the primary limits to the growth of the solar market is supply constraints of polysilicon, the key material used in solar modules and integrated circuits. To address these supply constraints, we also plan to manufacture sufficient quantities of polysilicon to meet our initial and future expected demand.”
Hoku Scientific intends to operate the solar module business as a separate business under the name “Hoku Solar.” Hoku Solar expects to enter the market through the manufacture and sale of polysilicon-based photovoltaic modules, with planned initial manufacturing capacity of 30 megawatts per year beginning in the second half of calendar year 2007.
Hoku Scientific intends to build a polysilicon processing plant designed to initially produce up to 1,500 metric tons of polysilicon per year, beginning in the second half of calendar year 2008. The polysilicon plant is expected to be operated by Hoku Scientific as a separate business under the name “Hoku Materials.”
Initially, plans call for approximately 300 metric tons of polysilicon produced by Hoku Materials to be allocated to Hoku Solar, while the remaining 1,200 metric tons are expected to be available for sale to the solar and integrated circuit markets.
Hoku Scientific also intends to form a new business unit called “Hoku Fuel Cells” to continue the Company’s core business of developing, marketing, manufacturing and selling membranes and MEAs for stationary and automotive PEM fuel cells.
“This change to our organization reflects the diversification of our business and the pursuit of related clean energy technology opportunities,” said Shindo. “We are confident in the long-term opportunity of the fuel cell market in general, and we remain committed to our traditional fuel cell business. With our plans to enter the solar and polysilicon markets, Hoku Scientific is positioning itself to become a world-leader in diversified clean energy technologies.”
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