As oil and other energy resources continue to skyrocket, it is wise to note that alternative energy resources such as solar will gain ground, and eventually may become cost equivalent. With this in mind, many investors are shifting their money into more green, earth-friendly alternatives such as solar power.
LDK Solar Co., Ltd. (LDK) has announced the signing of a five-year contract to supply multicrystalline solar wafers to German-based Qimonda AG (QI). These wafers are the basic raw material used in the creation of solar cells, and are an integral component in solar panels used to power homes and other structures. Under the terms of the agreement, LDK will be delivering the solar wafers to QI over a five-year period (2009 – 2013). Qimonda will make an advanced payment representing a portion of the contract value to LDK. In addition to the monetary remuneration, QI has agreed to supply scrap silicon material to LDK from their current surplus. The scrap silicon is a result of the DRAM operations being run by Qimonda.
Along with the new contracts, rumors have once again emerged that Siemens (SI) is considering a buyout of LDK in the mid $40 range. Shares gained over 5% on heavy volume on the speculation. The news of LDK’s contract with Qimonda came at the end of the day, with the news of the potential Siemens buyout still hanging fresh in everyone’s head.
Qimonda saw a jump of over 18% with release of the recent contract agreement. Other solar companies are also benefitting from overpriced oil. JA Solar Holdings (JASO) is up more than 10.5%, while Suntech Power Holdings Co. Ltd. (STP) saw a 5.5% boost after receiving a buy rating from Jesup & Lamont.
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