Hoku Scientific Inc., in a move giving it flexibility to expand its Idaho polysilicon plant, said it has lined up key manufacturing equipment should it decide to add a second phase to the facility.

The company announced it has signed a new contract with GEC Graeber Engineering Consultants GmbH that will allow for the purchase of polysilicon reactors for the production of up to 8,000 metric tons of polysilicon annually.

Under a previous agreement with GEC Graeber, Hoku ordered reactors capable of producing 2,000 metric tons of polysilicon, or about 4.4 million pounds, annually. That contract gives Hoku an option to buy reactors to produce an additional 500 metric tons annually.

The new contract gives the Kapolei-based company an option to buy reactors to produce an additional 5,500 metric tons of polysilicon annually.

Hoku is building the plant to take advantage of surging demand for polysilicon, a material that's used in the production of cells for photovoltaic panels and in the production of computer chips. The first phase of the plant, located on 67 acres, is expected to begin producing polysilicon for delivery during the first half of next year and reach full capacity by the summer of 2010.

Darryl Nakamoto, Hoku chief financial officer, said the first phase will be capable of producing 3,500 metric tons of polysilicon.

He said adding a second phase to the plant will be contingent on how many contracts Hoku receives. He said the second phase will have space to produce up to 4,500 metric tons a year. Nakamoto declined to disclose the contract value.

The contract with GEC Graeber gives Hoku the option of ordering extra reactors at a predetermined pricing and delivery terms.

"The additional contract with GEC gives us the flexibility to expand our production capacity at a predictable cost and with a guaranteed reactor delivery schedule," said Dustin Shindo, Hoku chief executive officer, in a press statement.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.