Norway-based solar wafer firm REC Wafer has filed for bankruptcy after its parent company REC ASA announced the termination of further funding last week.
REC Wafer was one of the Europe-based solar wafer firms that requested Taiwan-based downstream solar firms oblige to supply contracts in the second quarter.
According to sources, many Taiwan-based solar cell makers signed supply contracts with REC Wafer around second- and third-quarter 2008. Before the downstream firms could make deposits, the financial crisis hit causing firms to focus on weathering the storm. As demand returned in 2010, the price of polysilicon fell from US$400/kg to US$100/kg, meaning the contracts were not able to reflect the true market conditions. Nevertheless, due to growing demand, firms did not re-negotiate contract prices.
The solar market began to see falling demand in second-quarter 2011 and many Europe-based solar firms were facing financial troubles. In the second quarter of 2012, REC Wafer demanded Taiwan-based customers oblige to contracts or the firm would take customers to court. Some Taiwan-based solar firms re-negotiated prices and some paid agreement termination fees.
Some Taiwan-based firms have included write-offs due to long-term supply contracts in the second quarter. Customers that refused to pay contract termination fees or oblige to contracts have been engaging in court processes. Despite the fact that REC Wafer has declared bankruptcy, the lawsuits will continue, said the sources.
Article translated by Jackie Chang
