MEMC Electronics Materials ( WFR), a manufacturer of semiconductors, said Thursday that it signed a non-binding letter of intent with solar energy company Suntech Power ( STP) for supply of solar-grade silicon wafers. Under the terms of 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. The St. Peters, Mo.-based MEMC expects the sale of wafers to generate revenue of $5 billion to $6 billion over the 10-year period. 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 its manufacturing capacity. In addition, MEMC said that it will receive a warrant to purchase up to a 4.99% equity stake in Suntech. "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," the company said. MEMC's stock was up $2.34, or 6.4%, to $38.95 in pre-market activity Thursday.