SAN FRANCISCO—Silicon wafer supplier MEMC Electronic Materials Inc. said Wednesday (Sept. 5) it agreed to pay 70 million euro (about $88.2 million) to specialty chemical provider Evonik Industries AG to settle a supply dispute.
MEMC (St. Peters, Mo.) said the agreement is related to two long-term "take-or-pay" supply agreements for trichlorosilane, a chemical used in the production of ploysilicon. The trichlorosilane was to be supplied by Evonik to MEMC's polysilicon facility in Merano, Italy. MEMC announced last year it would idle that plant as part of a restructuring action.
Under the settlement agreement, MEMC will pay Evonik 70 million euro over the next five quarters, including 10 million euro (about $12.6 million) in the current quarter. Also as part of the agreement, MEMC will acquire the Evonik TCS production plant located on MEMC's Merano site, MEMC said. Both plants will continue to be idle pending the resolution of a number of cost-related discussions with the Italian government and other parties, MEMC said.
"Our partners at Evonik recognized the seismic shift in solar that occurred in 2011 and worked with us to find a solution that benefitted both parties," said Ahmad Chatila, MEMC's CEO, in a statement.
MEMC said it expects to recognize a material benefit to operating income in the 2012 third quarter due to the settlement agreement, which was less expensive than previous management estimates.