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LDK Solar, Q-Cells Ink Supply Deal

Under the 10-year deal, LDK will deliver polysilicon and multicrystalline solar wafers to the German company.
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LDK Solar


soared more than 19% Monday after the China-based company struck a 10-year supply contract with a German solar-cell manufacturer.

LDK will, from 2009 through 2018, deliver polysilicon and multicrystalline solar wafers allowing


to make photovoltaic cells with more than 6 gigawatts of overall electrical output.

This agreement -- which Q-Cells says works to "deepen" the companies' existing long-standing relationship -- is of a "take or pay" nature. That means Q-Cells must pay certain fees should it refuse any product deliveries.

Q-Cells will prepay 10% of the silicon value for required expansion financing. And if LDK expands its manufacturing capacity, Q-Cells has the option to buy 30% of the expanded production. Specific financial terms weren't disclosed.

Q-Cells said that deliveries will start with 1,000 metric tons annually in 2009, accelerating to 5,000 tons by 2013.

Shares of LDK were recently up $8.85 to $54.60.