Polysilicon Dispute Settled

Evonik Industries and the polysilicon maker MEMC Electronic Materials have resolved a dispute related to Evonik’s supply of trichlorosilane (TCS) to MEMC’s polysilicon plant in Merano, Italy. The two companies had previously signed a long-term take-or-pay contract under which an Evonik plant at the Merano site supplied MEMC with TCS, a polysilicon raw material. In December 2011, after a year of falling prices, MEMC announced that it would idle the polysilicon plant and possibly close it altogether unless it received large reductions in feedstock, power, and other costs. The firm also ended its supply agreement with Evonik. Under the settlement, MEMC will compensate Evonik by paying a total of $90 million over the next five quarters. MEMC will also acquire the Evonik TCS plant. Although the polysilicon and TCS plants both remain closed, MEMC says the settlement with Evonik is “a significant step” toward achieving its cost-reduction goals.