MEMC and Suntech Announce Silicon Agreement

MEMC Electronic Materials, Inc. (NYSE: WFR), a leading silicon supplier, has signed a non-binding Letter of Intent (“LOI”) to supply Suntech Power Holdings, Ltd. (NYSE: STP), a leading producer of solar cells and modules, with silicon wafers over a 10-year period.

Under the terms outlined in the LOI, MEMC will supply solar wafers to Suntech over a 10-year period with pre-determined pricing, on a take or pay basis beginning in the first quarter of 2007. Sales of the wafers over the 10-year period would generate between $5 billion and $6 billion in revenue for MEMC.

As part of the arrangement and in order for MEMC to meet Suntech’s supply requirements, Suntech will advance funds to MEMC in the form of an interest-free loan or security deposit which will be used by MEMC for expansion of MEMC’s manufacturing capacity. In addition, MEMC will receive a warrant to purchase up to a 4.99% equity stake in Suntech.

“Suntech is a fast growing player in the solar market, and we are pleased with the prospect of helping them achieve a leading role in the marketplace,” commented Nabeel Gareeb, MEMC’s CEO. “The solar market is growing at an impressive pace at over 30% per year, and MEMC is well positioned to capitalize on the opportunities available in this marketplace. We have been a leader in wafer manufacturing for over 40 years, and are excited about the opportunity to complete our expansion into this fast-growing adjacent space, while staying focused on our core competency of making wafers.”

“We’re pleased to pursue this long term wafer supply relationship with MEMC,” said Dr. Zhengrong Shi, Chairman and CEO of Suntech. “Locking in a steady supply of solar wafers is key to our ability to increase production output while maintaining our focus on innovation. We look forward to a long relationship with MEMC that will benefit our customers as the demand for alternative energy, and solar power in particular, continues to grow.”

The LOI reflects the parties’ intent to conclude a definitive agreement in August 2006. MEMC and Suntech cannot assure that the definitive agreement will be concluded within this time frame, or at all. Execution of the definitive agreement is contingent on agreement on all material terms and other customary closing conditions for transactions of this nature.