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EMCORE Enters Into Agreement to Establish Its Suncore Joint Venture in Huainan, China

Date Announced: 07 Dec 2010

Suncore Manufacturing, Development and Distribution Operations to Be Established in Huainan, Anhui Province of China; Suncore Receives Land Grant of 263 Acres and Various Other Incentives; Suncore Awarded a $75 Million Cash Grant to Fund Manufacturing Equipment Purchases; Suncore to Receive a $0.21 Rebate for Every Watt of the First 1,000 MW of CPV Products.

ALBUQUERQUE, NM--(Marketwire - 12/07/10) - EMCORE Corporation (NASDAQ:EMKR - News), a leading provider of compound semiconductor-based components, subsystems and systems for the fiber optics and solar power markets, today announced it has entered into an investment and cooperation agreement ("Agreement") with San'an Optoelectronics Company, Limited ("San'an") and Huainan municipal government ("Huainan"). The Agreement calls for EMCORE and San'an to register and operate their previously announced joint venture, Suncore Photovoltaics Co., Ltd. ("Suncore"), in Huainan City to develop and manufacture high-concentration photovoltaic ("CPV") components and systems for terrestrial solar power applications.

On July 30, 2010, EMCORE entered into a joint venture agreement with San'an for the purpose of engaging in the development, manufacture, and distribution of CPV receivers, modules and systems for terrestrial solar power applications. The joint venture agreement provides for Suncore to be owned 40 percent by EMCORE and 60 percent by San'an. EMCORE and San'an previously planned to establish Suncore's primary manufacturing operations in Wuhu City, Anhui province of China. Suncore's new location is expected to expedite the schedule for construction and commencement of operations and provides other economic incentives for the joint venture.

The Agreement provides for Suncore's engineering, manufacturing, and distribution operations for CPV components and systems to be established in the Economic and Technology Development Zone of Huainan City. Suncore is expected to establish a total of 1,000 megawatts (MW) of manufacturing capacity in Huainan over the next five years, with 200 MW of capacity to be ready by the end of 2011, 300 MW by the end of 2013, and the remaining 500 MW by the end of 2015. At that capacity, the total capital expenditure and working capital investment is estimated to be eight billion RMB (approximately $1.2 billion).

In addition, to support start-up and on-going operations of Suncore, Huainan will provide a land grant of 1,600 mu (approximately 263 acres), extended tax holidays, and other financial incentives. Moreover, Huainan will provide 500 million RMB (approximately $75 million) to Suncore within 3 days of the start of the construction of the Suncore manufacturing plant in Huainan. The cash grant is restricted to be used solely for capital equipment purchases to support the establishment of Suncore operations in Huainan. Furthermore, for the first 1,000 MW, Huainan will provide a 1.4 RMB (approximately $0.21) cash rebate to Suncore for every watt of CPV systems manufactured in Huainan and sold in China.

"China is viewed as one of the most promising markets for CPV solar power," said Dr. Hong Q. Hou, President and CEO of EMCORE. "This Agreement demonstrates Huainan's strategy and commitment to the growth of its renewable energy industry. These financial incentives will accelerate the commercialization of EMCORE's CPV technology and production ramp. We believe that this investment by Huainan and the establishment of Suncore's low cost manufacturing operation, will enable our CPV technology to become a cost effective solution for commercial and power utility applications," added Dr. Hou.

EMCORE and San'an are aggressively pursuing Suncore's business registration in Huainan and plan to commence facility construction in early 2011.

Source: EMCORE


EMCORE Corporation
Mark Weinswig
Chief Financial Officer
+1 (505) 332-5000

E-mail: info@emcore.com

Web Site: www.emcore.com

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