South Korea's LG Electronics will sign a five-year deal this week to buy silicon wafers for solar panels from Norway's REC Wafer, it said Sunday.
The contract, which will be signed on Thursday in Seoul, is worth at least US$340 million and supply will begin in limited quantities next year. Supply will increase over the contract period from 2010 to 2014.
LG Electronics has been building its solar panel and module business since June 2008 when it acquired the solar operations of sister-company LG Chem.
In October it announced plans to convert a dormant PDP (plasma display panel) production line at its factory in Gumi, South Korea, with two solar cell production lines. Both new lines will be able to produce 120 megawatts of solar modules per year. The first is expected to begin operations in the first quarter of 2010 and the second a year later.
The deal with REC Wafer will provide LG with the crystalline silicon wafers it requires to make solar cells.
Late last year LG ended tie-up talks with Germany's Conergy that would have seen the companies form a joint-venture solar energy company around Conergy's existing production site in Frankfurt. LG blamed the poor global economy for the change in plans.