LDK Solar (NYSE: LDK) announced Friday it had signed agreements for 312 metric tons of silicon to be delivered next year.
"We believe that this supply contract will help LDK achieve our wafer production and growth targets for 2008," said Nick Sarno, senior vice president of manufacturing at LDK, in a written statement.
The company also said it has begun construction on its own polysilicon plant in Xinyu City, China. The plant is on schedule to reach up to 6,000 metric tons of production capacity by the end of 2008, the company said.
LDK shares grew 8.5 percent to close at $29.55 per share Friday.
But they are still worth less than half of their peak value of $76.75 per share, set in September.
The company is facing allegations of discrepancies in its silicon inventory from a former financial controller, Charley Situ, as well as an investigation from the U.S. Securities and Exchange Commission (see LDK Says Inventory Discrepancy Allegations Have ’No Merit’, New Details Surface as LDK’s Stock Continues to Plunge, LDK Says SEC Is Inquiring Into Inventory Discrepancy Allegations).
Although unrelated to the silicon inventory in question, the new silicon supply is undoubtedly good news for LDK in the midst of a worldwide shortage of solar-grade silicon.
Other companies also have been scrambling to lock up more of the precious stuff.
German solar-cell manufacturer ErSol said Friday it signed a deal to buy 300 megawatts worth of silicon from Wacker Chemie, in a nine-year deal starting in 2010.
Earlier this week, Yingli Green Energy Holding Co. and Solarfun Power Holdings announced silicon contracts, while SunPower said it would open the largest silicon ingot-pulling factory in Korea (see Solar Scrambles for More Silicon).
But at least some LDK investors appear to be waiting to hear the results of an independent audit of LDK’s silicon inventory before deciding whether to forgive the company.
Earlier this month, the company said the audit committee expects to report its findings early next month (see Chinese Solar Gets a Boost). LDK said it is waiting for those results before it discloses its third-quarter earnings (see Solar Stocks Bounce After Hitting Bottom).
As a foreign company, LDK only is required to file earnings with the SEC once per year. Otherwise, the company would have been required to file third-quarter earnings several weeks ago.
In October, the company estimated that revenue for the third quarter would be between $140 million and $150 million, with fourth-quarter guidance of $165