REC Silicon — Investor Presentation 2015

Jul 15, 2015

Disclaimer

This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for REC Silicon ASA (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for REC Silicon ASA's businesses, energy prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the presentation. Although REC Silicon ASA believes that its expectations and the presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the presentation. REC Silicon ASA makes no representations or warranties, expressed or implied, as to the accuracy, reliability or completeness of the presentation, and neither REC Silicon ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

This presentation was prepared for the Second quarter 2015 results presentation on July 16, 2015. Information contained herein will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation.

REC Silicon ASA shares have not been registered under the U.S. Securities Act of 1933, as amended (the "Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act.

REC Silicon Q2 Financial Results	T. Torvund, CEO
U.S. / China Trade	F. Sullivan, CLO
Market Outlook	T. Torvund
Financial Overview	J. May, CFO
Yulin JV Update	T. Torvund
Moses Lake Capacity Reduction	T. Torvund
Guidance	T. Torvund
Q & A

REC Silicon ASA Second Quarter 2015 Highlights

Revenues: \$93.0 M

EBITDA: \$ 5.8 M

Strong Polysilicon Production

• Total polysilicon production 5,071 MT
• FBR cash cost \$11.0/kg

Polysilicon sales volume 3,817 MT

• 1,248 MT Inventory Build
• 20% Solar Grade price decline

Silicon Gas Sales

• 989 MT Silicon gas sales
• 21% Silicon gas price decline

Expansion Initiatives

• Yulin JV on-track

Production Capacity Curtailment in Moses Lake

• 2015 FBR production reduced by 2,030 MT
• Moses Lake Rx 25 & 26 expansion halted

REC Silicon ASA Q2 2015 Key Metrics

	Financials
	Revenue		\$93.0 M
	EBITDA		\$5.8 M
		EBITDA Margin	6.2%
FBR Production			FBR	Cash Cost
Actual	4,410 MT		Actual			\$11.0/kg
Guidance*	4,350 MT		Guidance*			\$11.5/kg
Deviation	1.4%		Deviation		-	4.3%

Total Polysilicon Production
Actual	5,071 MT
Guidance*	5,100 MT
Deviation	- 0.6%

Semiconductor Production
Actual	300 MT
Guidance*	340 MT
Deviation	- 11.9%

Silicon Gases Sales Vol.
Actual	989 MT
Guidance*	700 MT
Deviation	41.3%

* Guidance presented May 6, 2015

5 © REC Silicon ASA. All rights reserved. Confidential July 16, 2015

Continued Strong Polysilicon Production and Low FBR Cost

Q2 2015 Prime ASPs Compared to Spot Indices

Lower Prime ASPs in China due to Trade Dispute

Import destination and average solar grade sales price (\$/kg)

Source: GCB Goodwill and REC Silicon

Q2 2015 Strong Silicon Gas Sales

• › Silicon gas sales exceeded guidance: 989 MT
• › Secured volumes in an effort to maintain market share
• Regaining customers lost due to U.S. West Coast port slowdown
• ASPs declined 21%
• › Anticipate silicon gas prices to return to Q1 levels in Q3

U.S. / China Trade Dispute

Current Solar Trade Conditions between U.S. and China

SolarWorld Cases in U.S.

• › SolarWorld One (Panels containing Chinese cells) initiated in 2011/12 after July 8, 2015 review:
• › ~21% Duty for Yingli
• › ~31% Duty Other Panel Makers
• › SolarWorld Two (Chinese panels containing outside China cells) - Dec. decision 77-90% Duties depending on the producer

Chin MOFCOM Case against US Polysilicon a response to the above

• a › ~57% duty on all Solar grade polysilicon imported from the U.S. from 2013
• › Process in Trade Shutdown part of the response
• › Affects REC Silicon, Hemlock Semiconductor, and Wacker's Tennessee production

Challenges for All Stakeholders in US/China Trade War

U.S. Solar Panel Cases

• › Chinese Panel Makers
• Face at least a 31% duty, creates competitive opportunity for third countries in important U.S. panel market
• On-going pricing uncertainty & resource drain
• › SolarWorld
• Is a 31% duty a benefit?
• Offshoring out of China threat continues
• › Wider U.S. solar industry artificially high prices

China Polysilicon Case

• › Chinese polysilicon buyers
• Face restricted access to polysilicon
• Higher in-China polysilicon prices
• › U.S. Polysilicon locked out of China market

› It does not make sense as a commercial matter to continue with this situation…

Trade Resolution Dynamics

U.S. & China Government

• › Bilateral discussions focused on environmental cooperation, prior to the Paris Climate Summit (late 2015) and solar trade is a relevant issue
• "Global resolution" of solar trade dispute discussed at Ministerial & Ambassador level in June China/US Strategy meetings
• Xi Jinping visit to the U.S. planned for September 2015
• › U.S. Government has many resources allocated towards this effort, increased recently
• › Substantial U.S. Congressional support for a global resolution
• › Threshold condition to global resolution is the panel dispute, polysilicon resolution follows

SolarWorld & Chinese panel discussions: Under U.S. law, SolarWorld controls the dispute

Yulin JV partner Youser Group: Continued lobbying efforts towards MOFCOM

• › Resolution of tariff issue is important to both Youser Group and Shaanxi government
• › Yulin JV is critical to establish China as technological leader in polysilicon

Market Outlook

• › 2015 Global Demand: 56 GW
• › China 15 GW
• › Europe 11 GW
• › Japan 9 GW
• › U.S. 8 GW
• › ROW 13 GW
• › Reported capacity changes from H1 to H2 2015
• Approximately 24,000 MT

(Based on 56 GW forecast*)

*Note: PV silicon demand based on average of four PV analyst indices @ 5 g/W.

Significant Production with Cash Costs above ASPs

16 © REC Silicon ASA. All rights reserved. Confidential July 16, 2015

Balanced Polysilicon Supply and Demand Expected by 2016

• › Existing capacity meeting near-term PV demand
• › New capacity from 2015- 2016 is the increased utilization of existing plants
• › Ramping expected to carryover into 2016
• › No new capacity expected after 2016 other than Yulin JV

Note: Polysilicon demand based on average of five market indices at 5 g/W. Semi demand included to show total polysilicon demand

Financial Review

Revenues - \$93.0 M

• › Increased Polysilicon Revenues
• 60% sales volume increase from Q1 2015
• 20% Solar Grade price decrease from Q1 2015 (Excluding Fines & Powders)
• › Silicon Gas Sales volumes 989 MT
• 34% Sales volume increase from Q1 2015
• 21% price decrease compared to Q1 2015

EBITDA \$5.8 M

• 77% Decrease from Q1 2015
• Lower prices
• Higher volumes

USD million

Yulin Plant Site July 2015

Yulin JV Update

Yulin JV – On Track

• › Detailed engineering continues
• Issuing equipment bid packages
• Supporting government design reviews

• Civil construction packages issuing

• › Bid review all major equipment

• Priority is long lead complex equipment
  • Reactors
  • Compressors
  • Pumps
  • Distillation columns
  • Pressure vessels

Yulin JV – Construction Underway

• › Construction
• Began in May 2015 focus on civil work
• Piling installation through Q3
• Critical equipment foundations in Q3 and Q4

Temporary Construction Facilities

Piling Rebar Delivery

2017 Start-up on Schedule

Moses Lake Capacity Reduction

Trade Implication: Moses Lake Capacity Curtailment

• › Trade dispute necessitates capacity reduction
• › Silane III to be shut down for remainder of 2015
• FBR production impact 2,030 MT
• › During the shut-down, maintenance will take place
• › Needed to maintain financial flexibility
• ~\$10 M spending reduction per quarter

Moses Lake Rx 25/26 Expansion Halted

• › Moses Lake expansion halted due to trade issues and to retain financial flexibility
• Rx 25 & 26
• Silane I restoration
• › Construction efforts brought to a close
• Prepared for restart when conditions allow

2015 Guidance

Q3 2015 Sales Mix Will Move Outside China and Inventory Reduction Expected Due to Capacity Curtailment

Polysilicon	Q1 2015	Q2 2015	Q3 2015 (F)
Production Volume (MT)	5,210	5,071	3,600
Inventory Change (MT)	2,818	1,248	1,500 drawdown

Updated 2015 Guidance

FBR Production
Q3	2,920 MT
Q4	2,430 MT
2015	14,270 MT
2015 (prior)	16,300 MT
Deviation	- 14%

FBR Cash Cost
Q3	\$15.2/kg
Q4	\$16.9/kg
2015	\$12.8/kg
2015 (prior)	\$12.5/kg
Deviation	- 2%

Silicon Gas Sales
Q3	720 MT
Q4	850 MT
2015	3,300 MT
2015 (prior)	3,700 MT
Deviation	- 12%

Semiconductor Production
Q3	330 MT
Q4	350 MT
2015	1,300 MT
No Change

Total Polysilicon Production
Q3	3,600 MT
Q4	3,250 MT
2015	17,130 MT
2015 (prior)	19,300 MT
Deviation	- 11%

CapEx
Maintenance	\$15 M
Expansion	\$40 M
2015 Total	\$55 M
2015 (prior)	\$85 M

Q3 2015 Reporting November 4, 2015