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

our revenue and customer base to target other leading photovoltaic cell and module producers around the
world. For the year ended December 31, 2006 and the three months ended March 31, 2007, we derived
approximately 75.5% and 50.0%, respectively, of our net sales from sales to manufacturers of photovoltaic
products in China and approximately 24.5% and 50.0%, respectively, from exports. During the year ended
December 31, 2006 and the three months ended March 31, 2007, our top five customers collectively
accounted for approximately 70.2% and 56.8%, respectively, of our net sales. Suntech and Solarfun
contributed 39.7% and 13.9%, respectively, of such net sales for the year ended December 31, 2006. During
the three months ended March 31, 2007, Suntech and Solarfun contributed 18.3% and 9.7%, respectively, of
our net sales. Chinalight contributed 13.6% of our net sales for the three-month period.
We have written agreements with our principal customers:
‚ Pursuant to our cooperation agreement with Suntech, we have committed to supply to Suntech
100 MW of wafers in 2007 and, in each year from 2008 to 2015, wafers equal to 40% to 60% of our
annual production. This cooperation agreement contemplates that the parties will agree annually on the
specific quantities and prices of wafers to be supplied each year. We and Suntech have periodically
negotiated the specific quantities and prices of wafers to be supplied under this cooperation agreement
and, as a result, we have generally delivered less quantities than provided in the cooperation agreement.
‚ Pursuant to our agreement with CSI, we have committed to supply to CSI an aggregate of
approximately 260 MW of wafers over a four-year period from 2007 to 2010, at prices to be determined
through negotiation on a monthly basis.
‚ Pursuant to our agreement with E-Ton, we have committed to supply to E-Ton an aggregate of
200 MW of wafers over a four-year period, from January 2007 through the end of 2010, at a fixed price
for the first six months of 2007 and at prices to be negotiated later for the remaining term of the
agreement.
‚ Pursuant to our agreement with Q-Cells, we have agreed to supply to Q-Cells approximately 180 MW
of wafers over a three-year period from 2007 to 2009, at prices to be negotiated from time to time. In
addition, we have agreed to supply to Q-Cells additional quantities of wafers from 2007 to 2009 in
exchange for certain quantities of silicon feedstock supplied by Q-Cells to us.
‚ Pursuant to our agreement with Solarfun, we have also agreed to supply to Solarfun approximately
10 MW of wafers from December 2006 to July 2007 at a fixed price, and approximately 60 MW of
wafers from July 2007 to June 2008 at prices to be negotiated later.
‚ We have also entered into a five-year solar wafer supply agreement with Solland Solar, commencing on
January 1, 2006 through December 31, 2010 and automatically renewable at one-year increments.
Both parties have agreed to determine the wafer supply quantities and prices for 2007 and each
subsequent year through negotiation.
‚ In addition, we have entered into agreements with BP Solar, Motech and Ningbo Solar pursuant to
which we have committed to supply each of them with specific annual quantities of wafers over the
next few years.
Our commitments to Suntech and other major customers have not materially affected our strategy to
diversify our customer base. As we expand our production capacity, we have been able to sell more of our
products to other customers and to broaden our geographic presence. During the three months ended
March 31, 2007, our net sales to China decreased to 50.0% of our total net sales as compared to 75.5% during
the year ended December 31, 2006, while our net sales to Asia Pacific ex-China during the three-month
period increased to 31.8% from 16.3% in 2006, with net sales to North America during the period increased to
8.2% from 5.0% in 2006 and net sales to Europe increased to 10.0% from 3.2% in 2006.
We have written agreements with most of our customers although our sales to some of our customers
have been based on periodic purchase orders. Our sales to Chinalight and Solartech Energy have been based
on short-term sales contracts and monthly and quarterly purchase orders. We typically require our customers
to prepay a portion of the contracted purchase price before we deliver our products.
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