Solar Cells Info

* Major contract covering the supply of metallurgical silicon concluded
* Establishment of an in-house wafer production in Malaysia
* Group to start manufacturing ingots
* Further expansion of thin-film technology activities decided
* New business area: planning and development of large-scale PV facilities
* Forecasts for fiscal 2008 and 2009 revised upwards

Bitterfeld-Wolfen, 27 March 2008
Source: Q-Cells.com press release
http://www.qcells.de/cmadmin_2_542_0.html

Today, on 27 March 2008, Q-Cells AG the world’s largest manufacturer of solar cells, presented its annual report for fiscal 2007 at a balance sheet press conference in Frankfurt/Main. The Company has confirmed its provisional figures.
With a production volume of 389.2 MWp, Q-Cells became the world’s largest manufacturer of solar cells last year. Sales rose by 59 % to EUR 858.9 million (EUR 539.5 million). Earnings before interest and taxes (EBIT) grew by 52 % to EUR 197.0 million (EUR 129.4 million). The EBIT margin, at 23 %, was therefore maintained at the high level of the previous year. Net income without the income contribution from the stake in Renewable Energy Corporation ASA (REC) amounted to EUR 127.2 million (EUR 87.7 million). Total net income stood at EUR 148.4 million in 2007, which is an
increase of 69% on the figure for the previous year.

Another large-scale contract for the supply of silicon Q-Cells AG and the Canadian company Bécancour Silicon Inc. (BSI) have signed a supply contract for solar grade silicon. BSI is a wholly owned subsidiary of Timminco Ltd, one the world’s leading specialists in speciality and light metals. Under the terms of the agreement, BSI will supply Q-Cells
with contractually fixed supplies of 410 tons in 2008 and 3,000 tons in 2009 at fixed prices. Deliveries will begin immediately. The parties will negotiate a further contract covering deliveries of up to 6,000 tons per year between 2010 and 2013 until the end of July 2008. Prices for these additional volumes will be negotiated contingent upon market conditions. This contract will make Q-Cells BSI’s largest customer for solar grade silicon.

BSI has developed a proprietary process which enables it to produce solar grade silicon by purifying metallurgical silicon. In extensive tests, Q-Cells has achieved very good results in manufacturing cells. Establishment of a wafer production plant in Malaysia. On the basis of its contractually agreed supplies of silicon, particularly in view of the new supply contract with BSI, Q-Cells has decided to incorporate its own wafer production capability in the production complex for solar cells at the new production plant in Malaysia, which will be constructed in 2008. Production capacity will match that of cell production and will amount to more than 300 MWp in the first phase of expansion.
Group to start manufacturing ingots
In addition to expanding wafer production, Q-Cells is starting production of the blocks of silicon from which wafers are sawn, which are known as ingots. The Company is developing a centre of expertise in this field at its Bitterfeld-Wolfen site with the aim of accumulating more experience in the manufacturing process in a test plant. Q-Cells will then establish an ingot production plant in Malaysia, which will be incorporated in the production complex there. Capacity will match that of cell production and is to reach more than 300 MWp over several phases of expansion. The decision on the start of ingot production was taken against the background of the substantial supply contracts for metallurgical
silicon, among others with BSI/Timminco.

Further expansion of thin-film business
Sontor GmbH, a wholly owned subsidiary of Q-Cells AG, will extend its production capacity for micromorph thin-film solar modules by 60 MWp in a first stage of expansion. Currently, Sontor is constructing its first factory with a capacity of 25 MWp in Bitterfeld-Wolfen. The ramp-up phase is to start at the new factory, which will increase total capacity to 85 MWp, at the end of the second quarter 2009.
New business area : planning and development of large-scale photovoltaic facilities
In 2007, Q-Cells AG established Q-Cells International GmbH, which is based in Bitterfeld-Wolfen, in order to be able to understand and open up existing and future sales markets better. This wholly owned subsidiary will operate as a developer of large-scale ground-mounted and roof top facilities. In this role, Q-Cells International will mainly make use of the thin-film modules produced by Q-Cells’ subsidiaries.

An initial project in Saxony-Anhalt is already being implemented. In the current year, Q-Cells expects the activities of Q-Cells International to make a contribution to sales of EUR 25 million after consolidation and this figure is expected to increase to EUR 50 million after consolidation in 2009.
Forecasts for 2008 and 2009 revised upwards
On the basis of the additional silicon supplies agreed with BSI for the current year, Q-Cells is now expecting production volume of 570 MWp in its core business, the manufacture of crystalline solar cells, in 2008 (previously 540 MWp). In total – including thin-film production – Q-Cells AG will presumably achieve total production of between 595 and 620 MWp. For 2008 as a whole, the Company is expecting total sales of approx. EUR 1.275 billion (previously approx. EUR 1.2 billion) and an EBIT margin of around 20 %. The Company is striving to achieve a return on sales of 14 % before
taking account of the REC contribution to income. Of the figure for total output, approx. 60 % will be produced in the second half. The reasons for this lie in the availability of additional capacity in both the core business and the thin-film business from the middle of the year and in scheduled measures to optimise production lines I to IV in the first half.
Q-Cells is now expecting sales of more than EUR 2 billion (previously EUR 1.7 billion) for 2009.

Production of crystalline solar cells is expected to amount to more than 1.5 GWp in 2010. Previously Q-Cells had assumed that production would exceed 1 GWp. Q-Cells is also continuing to strive towards production of between 400 and 600 MWp in thin-film modules.