Sept 25 Silicon wafer maker MEMC Electronic Materials Inc has agreed to cancel its contract to supply wafers to German solar components provider Conergy AG .
Conergy is no longer bound to purchase wafers for about $600 million over the contract period, which was originally set to run until 30 June 2018, Conergy said.
MEMC was to supply solar wafers to Conergy at a pre-determined price under a deal signed in 2007. The companies had reduced the size of the contract in January 2010 due to weak market conditions.
Prices of silicon wafers, used in semiconductor chips and solar cells, have fallen in the past year due to an oversupply.
MEMC will get a payment of $21.2 million from Conergy as a result of the termination. Conergy will also transfer to MEMC its portfolio of operations and maintenance contracts for solar power plants in Germany, Italy and Spain, representing up to about 175 megawatts of generation capacity.
MEMC said it was assessing the financial impact of the termination.
MEMC's shares, which have shed 30 percent of their value this year, closed at $2.82 on Tuesday on the New York Stock Exchange.