LDK Solar Co., Ltd. - Asia Europe Clean Energy (Solar) Advisory Co ...

Competitive Strengths
We believe that our rapid growth and strong market position are largely attributable to our following
principal competitive strengths:
Pure-play multicrystalline solar wafer manufacturer
We are a pure-play manufacturer focused on the production of multicrystalline solar wafers. We dedicate
all our management efforts and financial, technical, research and human resources to the design, development,
manufacturing and distribution of multicrystalline solar wafer products. As the global demand for solar power
expands, we believe we will continue to be well positioned to benefit from the growth of upstream polysilicon
capacity expansion and downstream photovoltaic cell and module production. Our position as a pure-play
wafer manufacturer minimizes competition and conflicts of interest with our customers and suppliers. It
enables us to form strong strategic relationships with them to gain feedback, improve our technology and
secure polysilicon feedstock.
Cost-effective production
We believe our production is cost-effective due to the following factors:
‚ Efficient Production Process. We have taken a series of cost reduction measures and developed
processing technologies to reduce our production costs at each step of the production process, which
include recycling more polysilicon, producing bigger ingots, increasing wafer size, reducing wafer
thickness, implementing a slurry recovery program and using automatic sorting equipment to reduce
wafer breakage.
‚ China-based Manufacturing Facilities. By manufacturing all of our products in China, we are able to
benefit from low-cost labor, land, ancillary equipment and facilities, consumables and utilities. The
low-cost labor in China allows us to utilize, in a cost-effective manner, recyclable polysilicon feedstock
that requires intensive labor in its sorting, inspection and preparation.
‚ Research and Development. Our research and development efforts are aimed at achieving both nearterm
production process efficiency improvements and long-term technological breakthroughs through
our collaborations with leading universities and our internal resources. Our efforts have enabled us to
diversify and optimize our polysilicon feedstock mix, to manufacture larger ingots and thinner and
larger wafers. We have established a dedicated laboratory in collaboration with Shanghai Jiaotong
University, a leading university in science and engineering in China, to enhance the performance of
consumables sourced in China such as crucibles, slurry and sawing wires as well as to develop
innovative equipment and technologies to improve our manufacturing processes.
Large-scale manufacturing utilizing state-of-the-art equipment
We have established a large-scale manufacturing facility with an annual production capacity of
approximately 215 MW as of March 31, 2007. Based on our current expansion plan, we intend to increase our
wafer production capacity to approximately 400 MW by the end of 2007 and approximately 800 MW by the
end of 2008. We utilize state-of-the-art equipment throughout our manufacturing process, which includes
DSS furnaces made by GT Solar and wire-saw squarers and wafering equipment made by HCT Shaping and
Meyer Burger. Our current purchase orders and commitments are sufficient to support our production
expansion to approximately 400 MW by the end of 2007 and to approximately 600 MW by mid-2008. We
believe our state-of-the-art production equipment strengthens our competitive position in production efficiency
and quality.
Strong relationships with suppliers and customers
Our strong relationships with suppliers have provided us with materials needed to produce our wafers and
ingots. According to Photon International, there is an industry-wide polysilicon supply shortage, which is a
hinderance to the growth of solar wafer manufacturing. Through purchase orders and long-term supply
contracts with virgin polysilicon manufacturers and other recyclable polysilicon purchase arrangements with
our photovoltaic cell producer customers, we have secured over 90% of our polysilicon requirements for 2007.
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