"We executed extremely well during the first quarter, despite the impact of the snowstorm, to deliver stronger than expected growth in net revenues and solid financial results," said Dr. Zhengrong Shi, Suntech's Chairman and CEO. "A vigorous demand environment in the major solar markets in Germany and Spain as well as in the emerging markets including South Korea and Italy drove strong pricing during the quarter. We expect demand to remain robust through 2008 and are virtually sold out for the full year."

First Quarter 2008 Highlights(1)

+ First quarter 2008 total net revenues grew 76.1% year-over-year to $434.5 million.

+ Consolidated gross margin increased to 22.2% for the first quarter 2008 compared to 19.0% for the first quarter of 2007. Non-GAAP(2) gross margin reached 22.5 % for the first quarter 2008, compared with 19.9% for the first quarter 2007.

+ Net income for the first quarter 2008 was $55.8 million or $0.33 per diluted American Depository Share (ADS). On a non-GAAP basis, Suntech's net income for the first quarter 2008 was $60.6 million or $0.35 per diluted ADS. Each ADS represents one ordinary share.

+ Suntech's PV cell production capacity was 540MW at the end of the first quarter of 2008. The Company is on track to reach 1GW PV cell production capacity by the end of 2008.

Commenting on Suntech's silicon outlook, Dr. Shi said, "During the first quarter we leveraged the funds raised through our convertible senior notes offering to enhance our long term cost competitiveness with new and expanded polysilicon supply agreements and strategic investment in key suppliers. Our ability to secure reasonably priced silicon reflects our competitive strengths with respect to our leading market position, financial strength, and close relationships with upstream suppliers. We are confident that this improved silicon outlook will help us to achieve our goal of providing grid parity solar solutions."

"During the first quarter, we continued to hire impressive talent in current and developing international markets including Germany, Spain, France, Greece, Italy, South Korea and Australia. This will lay the infrastructure for the continued rapid growth in our business, and provide the flexibility to respond to changing market dynamics. We are confident that our strategy of developing a broad portfolio of superior quality solar products, world-class manufacturing facilities and techniques, deep sales channels and improving cost efficiencies will differentiate Suntech as a clear leader in the solar industry," concluded Dr. Shi.

Total net revenues for the first quarter of 2008 were $434.5 million, representing an increase of 76.1% from the corresponding period in 2007.

Non-GAAP gross profit for the first quarter of 2008 was $97.9 million, an increase of 98.9% year-over-year. Non-GAAP gross margin for the Company's core wafer-to-module business was 23.3% and non-GAAP consolidated gross margin was 22.5%. The gross margin increased from the fourth quarter of 2007 primarily due to an increase in the average selling price driven by strong demand for Suntech's solar products, which was partly offset by increased silicon wafer costs.

Non-GAAP operating expenses in the first quarter of 2008 totaled $31.0 million or 7.1% of total net revenues. Operating expenses increased from the fourth quarter of 2007 primarily due to an increase in expenses associated with the expansion of Suntech's global sales network, marketing associated expenses, bank service charges due to increased financing costs and bank commission charges in China, and bad debt provision on certain long-aging receivables.

Non-GAAP income from operations for the first quarter of 2008 was $66.9 million, an increase of 86.5% year-over-year. Non-GAAP operating margin was 15.4%.

Net interest expense was $4.0 million in the first quarter of 2008 compared to net interest income of $1.1 million in the fourth quarter of 2007. The sequential increase in net interest expenses was primarily due to an increase in the short-term borrowing balance to facilitate daily operations, a decrease in interest income resulting from the reduction of the interest rate by the U.S. Federal Reserve Bank, and an increase in average borrowing costs due to the worsening global credit market.

Foreign currency exchange gain was $2.9 million in the first quarter of 2008 compared to a foreign currency exchange loss of $3.7 million in the fourth quarter of 2007. The foreign currency exchange gain in the first quarter of 2008 was primarily due to the appreciation of the Euro against the USD coupled with an increase in Euro-denominated sales.

Non-GAAP net income for the first quarter of 2008 was $60.6 million, an increase of 85.2% year-over-year, or $0.35 per non-GAAP diluted ADS.

On a GAAP basis, for the first quarter of 2008 gross profit was $96.4 million, an increase of 105.2% year-over-year. Gross margin for the core wafer to module business was 23.0% and consolidated gross margin was 22.2% for the first quarter of 2008.

On a GAAP basis, operating expenses for the first quarter of 2008 were $34.6 million or 8.0% of total net revenues. Income from operations was $61.8 million for the first quarter of 2008, an increase of 116.7% year-over-year. Operating margin was 14.2%. Net income was $55.8 million, an increase of 113.8% year-over-year, or $0.33 per diluted ADS.

In the first quarter of 2008, capital expenditures, which were primarily related to production capacity expansion and the construction of Suntech's new production facilities, totaled $63.2 million and depreciation and amortization expenses totaled $7.7 million.

As of March 31, 2008, Suntech had cash and cash equivalents of $1.0 billion, compared to $521.0 million as of December 31, 2007. The increase was primarily due to the completion of a $575 million convertible notes offering in March 2008. Inventory totaled $178.3 million as of March 31, 2008 compared to $176.2 million as of December 31, 2007.

Based on current operating conditions, Suntech expects revenues for the second quarter of 2008 to be in the range of $430 million to $440 million. Suntech expects minimal revenue contribution from KSL-Kuttler in the second quarter of 2008. Non-GAAP consolidated gross margin in the second quarter of 2008 is expected to be relatively consistent with the first quarter of 2008.

For the full year 2008, Suntech reiterates its expectation for total PV module shipments of 530MW and revenues in the range of $1.9 billion to $2.1 billion. Within 2008, Suntech believes that approximately 40% of this will be achieved in the first half of 2008 and 60% in the second half of 2008. Suntech expects that greater quantities of reasonably priced silicon will become increasingly available from mid-2008. Suntech targets to reach 1GW of installed PV cell production capacity by year-end 2008.

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