(Yicai Global) Nov. 30 -- Shares of Wuxi Shangji Automation settled down in the afternoon after jumping to near the 10 percent daily trading limit several times after its wholly-owned unit signed a three-year purchase framework contract for monocrystalline silicon wafers with Risen Energy worth some CNY11.4 billion (USD1.73 billion) based on current market prices.

Jiangsu province-based Shangji’s [SHA:603185] shares closed 8.62 percent up today at CNY86.71. Risen [SHE:300118] ended 3.94 percent higher at CNY17.40 after falling off from earlier highs in the case of both. Shangji nudged, but did not break through the 10 percent daily price ceiling several times throughout the day.

Ningbo, Zhejiang province-headquartered Risen's Risen Energy Changzhou unit will buy 2.25 billion of these chips from Shangji’s Hongyuan New Material Baotou subsidiary from next year to 2023. The actual amount may fluctuate by 10 percent within the target, which will rise each year to 450 million units next year, 800 million in 2022, and 1 billion in 2023. The parties will consult to determine the actual price paid each month, per the announcement.

Monocrystalline silicon wafers are the primary raw material used in manufacturing solar cell modules. Usually called single-crystal silicon, mono c-Si or mono-Si for short, they form the basis for the components and integrated circuits used in most of today's electronic devices. Mono-Si is also a photovoltaic, light-absorbent material used in solar cells.

Powering Poland

The contract will guarantee the long-term stable supply of the large high-efficiency chips, the raw material for the company’s solar cell module production, per Risen’s statement, which added it is now building photovoltaic plants in various eastern Chinese cities and Malaysia. Output of modules will be at least 30 gigawatts by the end of next year, it projects. The company will keep raising production based on the market’s receptiveness to these larger units, it stated.

Risen, whose core business is solar module research and development and production, currently has a 12.6 GW photovoltaic module production, according to its website. The company’s self-developed Titan series solar module products recently entered the European market, being installed in a rooftop solar power project in Poland.

Mono-Si has a crystal lattice that is continuous, uninterrupted to its edges and free of any grain. It may consist only of exceptionally pure silicon or be admixed with other elements. Its semiconducting qualities make it likely the most important material of the last few decades as its low-cost availability has been instrumental in developing the electronic gadgets that are the foundation of today's electronics and information revolution.

One megawatt equals one million watts. A gigawatt is one billion watts.

Editor: Ben Armour