Topsil concludes new raw material agreement and is planning an expansion of its production capacity

NASDAQ OMX Nordic Exchange Copenhagen		      18.12.2008
Nikolaj Plads 6
1067 København K	


No. 19/08




Topsil concludes new raw material agreement and is planning an expansion of its
production capacity 

Today Topsil concluded a new long-term agreement for supplies of raw material
(polysilicon) with a view to increasing the Float Zone (FZ) production in
Frederikssund. The agreement was conluded with Wacker Chemie AG, who is one of
two global suppliers of raw material for Topsil's Float Zone production, and it
is complementing the current long-term agreement made in 2006 with the other
supplier on deliveries in the period 2007 to 2012. 

The new long-term agreement will secure further supplies of polysilicon in the
period 2010 to 2017, and already on a continuing basis in 2009, Topsil will
receive deliveries from Wacker to be able to scale its production to increased
volumes as from 2010. 

The agreement has been concluded on market terms. As part of the agreement
Topsil is effecting a prepayment. The prepayment will be used for payments of
raw materials from Wacker in step with the supplies in the period 2010 to 2017. 

At the moment Topsil is evaluating the commercial possibilites to sell the
increased volume in similar long-term agreements to its customers. 


Expansion of production capacity and diversification
Polysilicon is the most important raw material in Topsil's Float Zone
production, and with the conclusion of the new long-term agreement Topsil
expects to be able to increase its production output by approx.10-15% in 2009,
approx. 20-25% in 2010, and approx. 30% in the subsequent years compared to the
volumes produced in 2008. 

Including the increased raw material volume the total production volume in 2009
is already fully allocated to customers. Topsil is going to increase its
production volume in two areas. During the first half of 2009 the opening hours
of the existing production equipment will be increased from the present five
days per week to continuous operation (24 hours per day, 7 days a week).
Furthermore, Topsil will start establishment of a new modern production plant
for clean room production in the beginning of 2010 in Frederikssund. The new
production plant will house new Float Zone pullers, and the production capacity
can be scaled in line with the future sales potential. 

Moreover, the new supply agreement will enable Topsil to develop new products
based on larger diameters (8 inch) than the present product range, which is
primarily composed of 4-6 inch products. Topsil expects a demand for 8 inch
products as from 2010. 


New long-term agreement with huge strategic value
The agreement with Wacker has not only a considerable commercial value for
Topsil to implement the company's long-term growth plan. It is also a matter of
strategic importance, as the market for raw materials for Topsil's Float Zone
production has changed during the last few years, implying that supplies of
polysilicon for Float Zone can only be guaranteed in larger volumes by entering
long-term agreements with the two global suppliers. 

The customers in the semiconductor industry require guarantees for stable
supplies from the Float Zone manufacturers. Topsil has now secured supplies
from both suppliers of raw materials in the world market, and through the
acquisition of Cemat Silicon in the fourth quarter of 2008 Topsil will be able
to use the cheaper Czochralski material as feedstock for Float Zone production
to the extent it is considered commercially relevant. 

The company estimates that the market for polysilicon will change in the years
to come, so in the future Topsil will have easier access to conclude new
long-term agreements for raw materials in line with the increasing demand. 

This will place Topsil in a favourable position to meet the customers'
increasing demand and has established the best possible platform for the
implementation of Topsil's growth strategy. 


Outlook for 2008
The conclusion of the raw material agreement with Wacker Chemie AG is not going
to affect the revenue and profit forecasts for 2008. 

Consequently, Topsil maintains its revenue forecast at a level of DKK 260-280m
and a pre-tax profit forecast at a level of DKK 50-60m, as announced in
connection with the interim report for the nine months ended 30 September 2008. 

Please direct any questions regarding this announcement to:
Keld Lindegaard Andersen, CEO, tel. +45 47 36 56 10



Topsil Semiconductor Materials A/S



Jens Borelli-Kjær			Keld Lindegaard Andersen
Chairman				CEO
+45 40 16 14 82			+45 21 70 87 72



Please note that this translation is provided for convenience only. The Danish
version shall prevail in case of discrepancies.