REC Silicon - Ceasing of Production at Moses Lake, Washington Facility, Transitioning to Pure-Play Silicon Gas Producer

30 Dec 2024 20:45 CET

Moses Lake, Washington USA - December 30, 2024: REC Silicon ASA ("REC Silicon"
or the "Company") announced that it is ceasing production at its Moses Lake,
Washington facility.

Production of polysilicon will be discontinued at the Moses Lake facility,
while equipment involved in production of silicon gases will be maintained in
a safe and recoverable mode that incurs minimal interim costs, allowing the
unit to restart with reasonable notice. This will give the Company the
flexibility to capitalize on future customer demand for Silicon Anode or other
gases while minimizing near-term operational costs.

This announcement follows the Company's decision to shut down polysilicon
production at its Butte, Montana facility in February 2024. Once the shutdown
process at the Moses Lake facility is complete, REC Silicon will have
completely discontinued the production of polysilicon at both facilities.
Moving forward, REC Silicon will focus its business efforts on silicon gases
where the Company has clear strength, market positioning, and product
differentiation. The Company is prioritizing driving costs out of its silicon
gas assets and optimizing production, with a goal to return to profitability.

Production Issues at the Moses Lake Facility
The shutdown of the Moses Lake facility follows numerous, previously disclosed
efforts to improve the level of some key impurities that resulted primarily
from the post-reactor product finishing and handling systems. Initiatives
included changing contact materials, procedures, operating conditions and
parameters, passivation measures and bypassing equipment; and bringing in
third-party resources to assist in evaluating and mitigating the situation.
However, the Company was unsuccessful in its attempts to fully rectify the
issues and ultimately received an unsuccessful qualification test, as
announced on December 17, 2024.

After further discussion with its customer, the customer is not able to wait
any longer for delivery of product that consistently meets the requirements at
the correct levels and can be delivered at the needed volumes. There are
currently no other customers in the USA and limited customers outside of
China, all of which are not options at this time due to product quality,
market and contract conditions and timing of potential need. The Company and
its customer are therefore now in advanced discussions regarding the
cancellation of its contract, including the elimination of any penalties and a
deferral of the repayment of the initial pre-payment. REC Silicon will provide
more information as it is available.

Strategic Review of Options
REC Silicon immediately began a review of strategic options to address
financial and operational challenges, including additional operational
adjustments, contractual re-negotiations, financing options, and other
mitigative actions. That review has yielded the following conclusions:


* Given the high fixed costs involved in operating the facility and
uncertainty related to the timing and quantifiable success of further
improvements in its product handling process, as well as the available
customer base, a shutdown of the Moses Lake facility is the best way to
maintain strategic optionality and financial flexibility.

* The Company sought additional financing options for support during this
period of transition and to fund the shutdown process and the Company
announced today that it is in advanced discussions with its largest
shareholder regarding a potential short-term loan.


In keeping with its long relationships and significant continuing presence in
the semiconductor materials supply chain, REC Silicon will execute the
shutdown in a manner that balances the best interests of all stakeholders. The
Company expects the shutdown of the Moses Lake facility to start immediately
and could take about three months and that the workforce in Moses Lake, along
with some other employees who support the Moses Lake business line, will be
reduced accordingly. The Company will provide additional information to
impacted stakeholders as it becomes available.

Contacts
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Nils O. Kjerstad
IR Contact
Phone: +47 9135 6659
Email: nils.kjerstad@recsilicon.com

About REC Silicon
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REC Silicon is a leading producer of advanced silicon materials, delivering
high-purity silicon gases to the solar and electronics industries worldwide.
We combine over 40 years of experience and proprietary technology with the
needs of our customers. Listed on the Oslo Stock Exchange (ticker: RECSI), the
Company is headquartered in Lysaker, Norway.

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

This information has been submitted pursuant to the Securities Trading Act §
5-12 and MAR Article 17. The information was submitted for publication at
2024-12-30 20:45 CET.

More information:
Access the news on Oslo Bors NewsWeb site

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