Drinda Automotive Trim announced in the middle of March that its subsidiaries have entered into a long-term supply agreement with Shangji Automation and its subsidiary. Under this agreement, Shangji’s subsidiary Hongyuan New Materials will be providing mono-Si wafers that will be used by Drinda’s subsidiaries for the manufacturing of PV cells. This news was first reported by local Chinese news outlets.
The procurement period will start in March 2022 and end in March 2025, and the total wafer quantity has been set at 648 million pieces, give or take 20%. Based on the current market price, the deal is estimated to value at RMB 4.342 billion (including tax). The actual price commitment has yet to be disclosed, and the actual unit price will fluctuate because it will be subject to monthly negotiations.
According to the information released by Shangji about this transaction, the procurement quantities for 2022 (March to December), 2023, 2024, and 2025 (January to March) are projected to come to 128 million, 240 million, 240 million, and 40 million pieces respectively.
In addition to the agreement with Drinda, Shangji has also secured another major wafer contract with Aiko Solar this March. According to the reporting by several renewable energy news websites, Shangji will provide around 552 million pieces of mono-Si wafers to Aiko Solar during the period of 2022-2024. This deal is estimated to be worth RMB 3.599 billion (including tax).