Hoku Materials and Tianwei New Energy Chengdu Wafer have signed of a second long-term contract for the sale and delivery of additional quantities of polysilicon by Hoku to Tianwei over a 10-year period beginning in the second quarter of 2010.

According to the contract, up to approximately $227 million may be payable to Hoku during the 10-year period, subject to product deliveries and other conditions. Together with the first contract, this brings Tianwei’s total orders from Hoku to approximately $511 million over 10 years.

The take-or-pay contract provides for the delivery of predetermined volumes of polysilicon each year, with the first shipment in the second quarter of 2010 and the remainder over a 10-year period at set prices that will decline throughout the term of the agreement.

The contract also provides for a deposit of $10 million to Hoku in September 2008, and requires that Tianwei make additional deposits for products in the amount of $12 million by December 15, 2008, $12 million by April 30, 2009, and $2 million upon first shipment.

Under the agreement, Hoku will grant to Tianwei a security interest in all of its tangible and intangible assets related to its polysilicon business to secure Hoku’s obligation to repay $36 million to Tianwei as a credit against product shipments over time.