According to the companies, the move is because of rapid changes in the market for silicon wafers.
In connection with the termination, Suntech will relinquish $53m in prepayments previously made to MEMC, and pay an additional $67m in four equal installments to be made between July 2011 and April 2012.
In addition, the company will take a non-cash accounting charge of about $92m resulting from the write-off of unamortized cost associated with warrants previously issued concurrently with the supply agreement in 2006.
In total, Suntech is expected to incur $212m of expenses related to the terminated supply agreement in the second quarter of this year, of which $67m will be additional cash outlay.
As a result of the termination, Suntech is no longer required to buy about 4.6GW of wafers between 2011 and 2016.
Separately, the company will incur a one-time non-cash charge of about $24m in the second quarter of 2011 related to the discontinuation of the research and development operations of its subsidiary CSG Solar.
US-based MEMC is engaged in the manufacture and sale of wafers and related products to the semiconductor and solar industries.
Suntech produces solar products for residential, commercial, industrial and utility applications.
