REC Silicon ASA - Solar Trade Dispute with Chin...

Moses Lake, Washington - July 1, 2018: REC Silicon ASA (REC Silicon)

REC Silicon will execute a layoff affecting nearly 40% of its current workforce in Moses Lake, Washington on July 2, 2018. This layoff will impact approximately 100 employees across the company and is a direct result of the on-going solar trade dispute between China and the United States. Due to this on-going trade dispute, the company has not been able to access its critical market in China since 2014. This has caused successive reductions in REC Silicon's operations in the United States.

REC Silicon has decided to reduce its production at Moses Lake to approximately 25% of total production capacity. This decision is in response to the solar trade dispute between China and the United States and reduced demand for solar grade polysilicon. The actions taken today will help maintain the company's liquidity, its ability to meet financial obligations, and maintain REC Silicon's capability to resume manufacturing operations when access to China's polysilicon markets is restored.

REC Silicon's management regrets today's lay-off of our highly-skilled colleagues. We have done all we can to avoid today's action, but we have no choice while the China market remains closed. It is a tremendous injustice that the hard-working Americans, who have made REC Silicon the polysilicon industry's technology leader and one of the most competitive producers in the world are now losing their jobs. REC Silicon can out-compete its foreign rivals, and we can do it from our manufacturing locations here in the United States. We simply need fair access to the China market.

REC Silicon invested $1.7 Billion to construct a state of the art, cost leading solar grade polysilicon production facility in Moses Lake, Washington in 2010. At its peak in 2011, REC Silicon generated $1 Billion in annual revenues from its operations in the United States and provided approximately 900 high paying jobs. Approximately 95% of REC Silicon's revenues are generated from sales in markets outside the United States. As a consequence of the on-going solar trade dispute with China, REC Silicon has executed successive layoffs to preserve its operations in the United States. After the layoff today, the company will continue to employ approximately 400 people at its facilities in Moses Lake, Washington and Butte, Montana. As a direct result of the solar trade dispute, REC Silicon's workforce has declined by a total of 500 jobs since 2011. During the same period, the company's revenues have declined by over 70% to $272 Million in 2017.

REC Silicon's fluid bed reactor (FBR) production facility in Moses Lake, Washington produces the lowest unsubsidized cost solar polysilicon in the world. Because REC Silicon employs a highly cost competitive manufacturing technology, the company's products are competitive without trade protection.  President Trump and U.S. Trade Representative Robert Lighthizer committed to pursue a resolution of the AD/CVD measures imposed by the Government of China on U.S. polysilicon. There has not been a resolution nor any re-opening of the China market to REC Silicon. It is now absolutely urgent that the U.S. Government takes steps to re-open the China market for U.S. polysilicon production to avoid further job losses, avoid the loss of U.S. technology leadership, to preserve this important part of the solar energy supply chain in the United States, to allow REC Silicon to re-start production, and most importantly allow us to re-hire our skilled and dedicated workers.

REC Silicon's markets for semiconductor grade polysilicon and silicon gas products have not been impacted by the solar trade dispute. REC Silicon's operations in Butte, Montana will continue to support these markets.

REC Silicon currently has approximately $42 Million in cash deposits and expects to report approximately $58 Million in revenues for the second quarter of 2018. Second quarter FBR production is expected to be 2,040 MT or 240 MT below the guidance on April 26, 2018. The results for the company's semiconductor segment and silicon gas sales are expected to be near guidance. Current market conditions will negatively impact the company's profitability and credit risk exposure. REC Silicon expects to recognize additional impairments to inventories, accounts receivable, and fixed assets in its second quarter earnings release on July 19, 2018.

Conference call

REC Silicon will host a conference-call to answer questions from investors, analysts and other interested parties on 2 July at 8:00 am CET.

To join this event, please use the below Click to Join link 5-10 minutes prior to start time, where you will be asked to enter your phone number and registration details. Our Event Conferencing system will call you on the phone number you provide and place you into the event. Please note that the Click to Join link will be active 15 minutes prior to the event.

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For further information, please contact:

Francine Sullivan, Vice President Business Development
REC Silicon ASA
Phone: [phone]
Email: [e-mail]

James A. May II, Chief Financial Officer
REC Silicon ASA
Phone: [phone]
Email: [e-mail]

Nils O. Kjerstad
IR Contact Europe
Phone: [phone]
Email: [e-mail]

About REC Silicon
REC Silicon is a leading producer of advanced silicon materials, delivering high-purity polysilicon and silicon gas to the solar and electronics industries worldwide. We combine over 30 years of experience and proprietary technology with the needs of our customers, and annual production capacity of more than 20,000 MT of polysilicon from our two US-based manufacturing plants. Listed on the Oslo Stock Exchange (ticker: REC), the company is headquartered in Fornebu, Norway.

For more information, go to: www.recsilicon.com

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

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Source: REC Silicon ASA via Globenewswire