some digging on WFR LDK

WFR
Q3, rev $472m, gross 238m, op 200m, net 151m
Q4, rev expected at $540m
future contract (may or may not pan out in all), $15-18B,

the most critical piece of info,
polysillicon capacity 6000 ton by end of year,

LDK,
Q3 rev by its CFO about $150m
growth rate expect 100% for the next 2 years,
but will incur huge negative cash flow for the next 2 years due to $1B facility buildup, however, if the market can sustain,
polysillicon capacity 8000 ton by end of 2008, 15000 ton by 2009,

so currently LDK's production, rev and net all stand at about 1/3 of WFR, if LDK can really finish the construction of their "big bang" factory, they will exceed WFR in polysillicon produciton by end of next year,

a big if of course,

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however, there is a big question if the market can sustain the current high pricing of sillicon wafers forever,

yesterday there was a news that STP has a new supply contract with Asia Sillicon, a new work-in-progress sillicion supply located in QingHai where they have extra cheap hydro-electricty which they expect to knock the wafer price by 80%, to below $40 per kg.

if that turns to be the case, then the game will change totally, LDK may never even get its $1B investment back after all,

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btw, LDK seems a subcontract of WFR, see below,

http://finance.google.com/group/google.finance.716047/browse_thread/thread/f1b5efcc288a787a

LDK as WFR (MEMC)'s subcontractor

Can we read between lines from the WFR's Earnings Call Tran? An
analyst asked about LDK as MEMC's subcontractor. Does it give us more
confidence on LDK?

http://seekingalpha.com/article/51467-memc-electronic-materials-q3-20...

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Operator

Krishna Shankar with JMP Securities your line is open.
Krishna Shankar - JMP Securities

Yes I don't whether you test on this but how many wafers
subcontractors do you have and, have you said anything about LDK
publicly being one of you wafer subcontractors and you know what steps
are you taking to -- there has been some obviously controversy on that
and can you talk about how you are doing quality control inspection of
your wafer subcontractors and your plans to bring that in-house?

Nabeel Gareeb

We saw that a little bit but basically we -- you know the number of
subcontractors we have typically said we have a handful. We don't
quantify exactly how many. The second -- we have not talked about who
our subcontracting partners are. Third is in terms of -- we do have a
dedicated subcontract management team, which includes looking at
delivery performance, performance to specifications, quality all of
those good things and that's just normal in a subcontract management
operation, so that occurs across all our subs.