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ATS Signs Second Long-Term Polysilicon Wafer Supply Agreement with Deutsche Solar AG

ATS Automation


CAMBRIDGE, ON, June 5 /CNW/ - ATS Automation Tooling Systems Inc. today announced that its Photowatt France subsidiary has entered into a second contract with Deutsche Solar AG for the long-term supply of polysilicon wafers. Deutsche Solar is one of Europe's largest wafer manufacturers and a subsidiary of SolarWorld AG.

Under the agreement that begins January 2010 and extends through December 2017, Deutsche Solar is obliged to deliver, and Photowatt is obliged to accept, approximately 32 million polysilicon wafers over the term of the agreement. Approximately three to four million polysilicon wafers are expected to be delivered annually beginning in calendar 2010 and continuing through to 2017. Photowatt plans to process these wafers into solar cells and modules, representing approximately 118 megawatts of solar power capacity over the term of the agreement.

‘‘We are pleased that we have now secured this significant additional long-term supply of high quality wafers from Deutsche Solar,’‘ said Ron Jutras, ATS President and CEO. ‘‘This newest agreement with Deutsche Solar further demonstrates our progress in advancing our long-term silicon supply strategy and reduces our exposure to the risks of industry-wide silicon shortages.’‘

This contract is the second polysilicon wafer supply agreement between Photowatt and Deutsche Solar. The first - a 10-year contract that begins in January 2009 - was announced October 16, 2006 and provides for the supply of approximately 40 million polysilicon wafers over the 10 year period. Additionally, on April 20, 2007 Photowatt announced it had entered into a multi-year contract to purchase a total of 1,700 tonnes of refined metallurgical-grade silicon (MgSi) from Dow Corning in order to allow Photowatt to produce MgSi-based solar cells as part of its product mix. Shipments under this contract have now commenced and will continue until December 31, 2011.

Advance payments under the Deutsche Solar contracts will be applied against the price of wafers received during the life of the commitments. The price per wafer will be adjusted at the beginning of each calendar year based upon an agreed formula. Management believes that these terms are reflective of current commercial terms in the solar industry for supply contracts of similar durations.

About ATS
ATS Automation Tooling Systems Inc. provides innovative, custom designed, built and installed manufacturing solutions to many of the world's most successful companies. Founded in 1978, ATS uses its industry-leading knowledge and global capabilities to serve the sophisticated automation systems' needs of multinational customers in healthcare, computer/electronics, automotive and consumer products. Through its solar business, ATS participates in the rapidly-growing solar energy industry. It also leverages its many years of repetitive manufacturing experience and skills to produce, in high volume, precision components and subassemblies and to answer the specialized repetitive equipment manufacturing requirements of customers. ATS employs approximately 3,500 people at 25 manufacturing facilities in Canada, the United States, Europe, southeast Asia and China. The Company's shares are traded on the Toronto Stock Exchange under the symbol ATA. Visit the Company's website at www.atsautomation.com.

Note to Readers
This news release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws (‘‘forward-looking statements’‘). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of ATS, or developments in ATS's business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. ATS cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements relate to, among other things, expected size and timing of deliveries under the Deutsche Solar contract that is announced in this news release; Photowatt's plan to process the wafers to be supplied and the estimated solar power capacity to be manufactured therefrom; reduction in exposure to risks of silicon shortage; quantities and timing of deliveries of wafers to be supplied under the first Deutsche Solar contract; quantity and timing of deliveries under the Dow Corning contract for metallurgical-grade silicon; and the application of payments and adjustments to pricing under the Deutsche Solar contracts. The risks and uncertainties that may affect forward-looking statements include, among others; general market performance; market performance within the solar sector; ability to secure required funding for the solar business; performance of ATS's solar business; potential inability of silicon suppliers to meet delivery and schedule targets; failure or delay on the part of the wafer supplier in procuring the necessary silicon or establishing the necessary capacity to produce the wafers under the contract; potential for unexpected manufacturing problems to be encountered by the suppliers; potential for variation in quality of silicon supplied under the contracts; in the case of metallurgical silicon, the potential for the silicon product to be of less than optimal suitability for Photowatt products; political, labour, supplier or other disruptions in the manufacturing and supply of the silicon products by the suppliers; currency fluctuations; achievement of technical advances in cell efficiency; unforeseen problems with Photowatt France's use of refined metallurgical silicon; the risk that desired cell efficiencies relating to refined metallurgical grade silicon technology cannot be achieved and/or that the market is unreceptive to lower efficiency cells and as a result it is not an economically-viable alternative to the use of conventional solar grade silicon; reversal of current silicon supply arrangements, inability to finalize agreements, strategic partnerships, or alliances to provide for R&D initiatives and/or silicon supply and other problems that may be encountered with silicon supply sources; potential for silicon prices to decline in the face of long-term silicon supply arrangements; possibility that improvements in production efficiencies will not be obtained and/or, if they are, will not be sufficient to offset higher silicon costs and shortages and any reductions in average selling price of solar products; the cost and availability of silicon, including silicon powder and fines, and other raw materials and certain specialized manufacturing tools and fixtures used in the production of Photowatt's products; the successful expansion of production capability and adoption of new production processes; the extent of market demand for solar products such as those developed by the solar business; the availability and timing of government subsidies for solar products, the development of superior or alternative technologies to those developed by the solar business; and other risks detailed from time to time in ATS's filings with Canadian provincial securities regulators, including ATS's Management's Discussion and Analysis, Consolidated Financial Statements, Annual Report and Annual Information Form for the fiscal year ended March 31, 2006. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and ATS does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.

For further information:
Carl Galloway, Vice President and Treasurer
Gerry Beard, Vice President and Chief Financial Officer
(519) 653-6500


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