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

Wafering. After passing inspection, the polysilicon blocks are cropped and prepared for slicing. The
prepared polysilicon blocks are sliced into wafers by wire saws. We then wash and dry the wafers at our wafer
cleaning stations before our final inspection and packaging for delivery.
In addition, we also sell polysilicon materials, which include ingots and polysilicon scraps.
Illustrated below is a diagram of our ingot production and wafering process:
Polysilicon
preparation
Ingot
production
Ingot
squaring
Delivery Packaging Cleaning
Wafering
Materials used in our production process
Polysilicon Feedstock. The main raw material for multicrystalline wafer and ingot production is
polysilicon feedstock. We use a variety of polysilicon materials, including solar-grade virgin polysilicon that is
at least 99.9999% pure, recyclable polysilicon scraps from third parties and silicon powder.
Crucibles. A crucible is a ceramic container used to hold polysilicon feedstock for melting in the furnace
and has to withstand extremely high temperatures. Crucibles are currently not reusable, as once the ingot is
formed, the crucible holding the ingot will be broken and removed from the ingot.
Slurry and Wire. Slurry is used in the wire sawing process. It is a fluid composed of silicon carbide, or
SiC, which functions as an abrasive, and polyethylene glycol, or PEG, which acts as a coolant. Wires are used
in wire saws to carry the slurry in order to create an abrasive cutting tool.
Production facilities
We manufacture multicrystalline wafers and ingots at our facilities in Xinyu city, Jiangxi province, China.
Our manufacturing facilities occupy a site area of approximately 172,000 square meters in the Xinyu Hi-Tech
Industrial Park of the high-tech development zone of Xinyu city.
We currently have two plants to house our operations in the Xinyu Hi-Tech Industrial Park. As of
March 31, 2007, we had the following equipment in operation:
‚ 61 DSS furnaces used for ingot production;
‚ 15 squarers used to cut ingots into blocks;
‚ 27 wire saws used to slice blocks into wafers; and
‚ other supplemental or ancillary facilities.
Our annual production capacity as of March 31, 2007 was approximately 215 MW.
Production capacity expansion
We are constructing a third plant, which is expected to be completed in the third quarter of 2007. We
plan to install additional manufacturing equipment to increase our total annual production capacity to
approximately 400 MW by the end of 2007 and approximately 800 MW by the end of 2008.
As of March 31, 2007, we had commitments from our equipment suppliers for the delivery of
139 additional DSS furnaces, 50 additional squarers and 183 additional wire saws, which can support an
annual manufacturing capacity of approximately 600 MW by mid-2008. We currently do not have contractual
commitments for all the equipment necessary for the expansion of our production capacity from 600 MW to
approximately 800 MW by the end of 2008. We have, however, already commenced negotiations with our
equipment suppliers for additional equipment. We plan to use a part of our net proceeds from this offering to
pay for such additional equipment as we have disclosed in ""Use of Proceeds'' in this prospectus. We also plan
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