##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
    Form 20-F
  (Mark One)o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR(g)
    OF THE SECURITIES EXCHANGE ACT OF 1934þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934:For the fiscal year ended
    December 31, 2008o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934:For the transition period
    from          too

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934:Date of event requiring this shell company
    report   Commission file number
    001-33464
 LDK Solar Co., Ltd.
 (Exact name of registrant as
    specified in its charter)
 N/A
 (Translation of
    registrants name into English)
 Cayman Islands
 (Jurisdiction of incorporation
    or organization)
 Hi-Tech Industrial Park
 Xinyu City
 Jiangxi Province 338032
 Peoples Republic of China
 (Address of principal executive
    offices)
   Securities registered or to be registered pursuant to
    Section 12(b) of the Securities Exchange Act.
  Title of Each Class

Name of Each Exchange on which RegisteredAmerican depositary shares, each representing
    one ordinary share of par value $0.10 per share

New York Stock Exchange, Inc.  Securities registered or to be registered pursuant to
    Section 12(g) of the Securities Exchange
    Act.
  Securities for which there is a reporting obligation pursuant
    to Section 15(d) of the Securities Exchange
    Act.
  Indicate the number of outstanding shares of each of the
    issuers classes of capital or common stock as of the close
    of
 the period covered by the annual report.
  Ordinary shares, par value $0.10 per share


113,110,396   o þ
  o þ
  þ o
  Regulation S-T o o
   Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o    U.S.
    GAAP þ

International Financial Reporting Standards as issued by the
    International Accounting Standards
    Board

o

Other o   o o
  Rule 12b-2 o þ
    o o




---



##### Table of Contents





Table of
    Contents
   
 PagesCertain Terms and Conventions


4Exchange Rate Information


4Forward-Looking Statements


5PART IITEM 1.


IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
    ADVISERS


6ITEM 2.


OFFER STATISTICS AND EXPECTED TIMETABLE


6ITEM 3.


KEY INFORMATION


6A. Selected Financial and Operating Data


6B. Capitalization and Indebtedness


9C. Reasons for the Offer and Use of Proceeds


9D. Risk Factors


9ITEM 4.


INFORMATION ON THE COMPANY


37A. History and Development


37B. Business Overview


38C. Organizational Structure


57D. Property, Plants and Equipment


58ITEM 4A.


UNRESOLVED STAFF COMMENTS


58ITEM 5.


OPERATING AND FINANCIAL REVIEW AND PROSPECTS


58A. Operating Results


58B. Liquidity and Capital Resources


82C. Research and Development, Patents and
    Licenses, Etc.


88D. Trend Information


88E. Off-Balance Sheet Arrangements


91F. Tabular Disclosure of Contractual
    Obligations


92ITEM 6.


DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES


93A. Directors and Senior Management


93B. Compensation of Directors and Officers


95C. Board Practices


96D. Employees


98E. Share Ownership


99ITEM 7.


MAJOR SHAREHOLDERS AND RELATED PARTY
    TRANSACTIONS


103A. Major Shareholders


103B. Related Party Transactions


103C. Interests of Experts and Counsel


104ITEM 8.


FINANCIAL INFORMATION


104A. Consolidated Statements and Other Financial
    Information


104B. Significant Changes


106ITEM 9.


THE OFFER AND LISTING


106ITEM 10.


ADDITIONAL INFORMATION


106A. Share Capital


106B. Memorandum and Articles of Association


106C. Material Contracts


108 2




---



##### Table of Contents



PagesD. Exchange Controls


108E. Taxation


109F. Dividends and Paying Agents


113G. Statement by Experts


114H. Documents on Display


114I. Subsidiary Information


114ITEM 11.


QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT
    MARKET RISK


114ITEM 12.


DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES


116PART IIITEM 13.


DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES


116ITEM 14.


MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
    HOLDERS AND USE OF PROCEEDS


116A. Material Modification to the Instruments
    Defining the Rights of Security Holders


117B. Material Modification to the Rights of
    Registered Securities by Issuing or Modifying or any Other Class
    of Securities


117C. Withdrawal or Substitution of a Material
    Amount of the Assets Securing any Registered Securities


117D. Change of Trustees or Paying Agents for any
    Registered Securities


117E. Use of Proceeds


117ITEM 15.


CONTROLS AND PROCEDURES


117ITEM 16.


RESERVED


119ITEM 16A.


AUDIT COMMITTEE FINANCIAL EXPERT


119ITEM 16B.


CODE OF ETHICS


119ITEM 16C.


PRINCIPAL ACCOUNTANT FEES AND SERVICES


119ITEM 16D.


EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
    COMMITTEES


120ITEM 16E.


PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
    AFFILIATED PURCHASERS


120ITEM 16F.


CHANGE IN REGISTRANTS CERTIFYING
    ACCOUNTANT


120ITEM 16G


CORPORATE GOVERNANCE


120PART IIIITEM 17.


FINANCIAL STATEMENTS


121ITEM 18.


FINANCIAL STATEMENTS


121ITEM 19.


EXHIBITS


121Index to Consolidated Financial Statements


F-1EX-1.1EX-4.8EX-4.9EX-4.10EX-8EX-12.1EX-12.2EX-13.1EX-13.2EX-15.1   3




---



##### Table of Contents



CERTAIN
    TERMS AND CONVENTIONS                    
    off-grid applications are to applications of PV
    products to systems that operate on a stand-alone basis to
    provide electricity independent of an electricity transmission
    grid; and
    on-grid applications are to applications of PV
    products to systems that are connected to an electricity
    transmission grid and feed electricity generated into the
    electricity transmission grid. EXCHANGE
    RATE INFORMATION   4




---



##### Table of Contents



Noon Buying RatePeriod

Period End

Average

High

Low(Renminbi per $1.00)2004


8.2765



8.2768



8.2774



8.27642005


8.0702



8.1936



8.2765



8.07022006


7.8041



7.9723



8.0702



7.80412007


7.2946



7.6058



7.8127



7.29462008


6.8225



6.9477



7.2946



6.7800November


6.8254



6.8281



6.8373



6.8220December


6.8225



6.8539



6.8842



6.82252009January


6.8392



6.8360



6.8403



6.8225February


6.8395



6.8363



6.8470



6.8241March


6.8329



6.8360



6.8438



6.8240April


6.8180



6.8304



6.8361



6.8180May (through May 15)


6.8225



6.8210



6.8248



6.8176      FORWARD-LOOKING
    STATEMENTS  and/or
  
    our goals and strategies;
    our future business development, results of operations and
    financial condition;
    our plans to expand our solar wafer production capacity;
    our plans to construct polysilicon production facilities and to
    manufacture polysilicon;
    expected growth of and changes in the solar wafer industry, PV
    power industry and renewable energy industry; 5




---



##### Table of Contents




    our ability to maintain and strengthen our position as a leading
    solar wafer producer globally;
    our ability to maintain strong relationships with any particular
    supplier or customer;
    effect of competition on demand for and price of our products;
    determination of the fair value of our ordinary shares and
    preferred shares;
    any government subsidies and economic incentives to the solar
    power industry; and
    PRC governmental policies regarding foreign investments.     PART I  ITEM 1.
    IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS    ITEM 2.
    OFFER
    STATISTICS AND EXPECTED TIMETABLE    ITEM 3.
    KEY
    INFORMATION A.  Selected
    Financial and Operating Data   6




---



##### Table of Contents



Period from July 5 to

Year Ended December 31,December 31, 2005

2006

2007

2008(In thousands, except per share and per ADS data)Consolidated Statement of Operations DataNet sales

$



$
105,454


$
523,946


$
1,643,495Provision for inventory write-downs










(4,170
)


(311,999
)Gross
    profit(1)






41,492



170,237



88,356Provision for doubtful recoveries of prepayment to suppliers














(20,582
)(Loss) income from
    operations(2)


(143
)


37,145



146,802



8,990Change in fair value of prepaid forward contracts














60,028Government subsidy






1,268



3,461



19,665Interest expense and amortization of discount on exchangeable
    notes and convertible senior notes issuance
    costs(3)


(102
)


(7,133
)


(9,419
)


(34,347
)(Loss) earnings before income tax


(309
)


30,069



143,301



75,362Net (loss)
    income(4)

$
(274
)

$
30,182


$
144,059


$
70,223Accretion of Series A, Series B and Series C
    preferred shares to redemption values






(2,729
)


(4,937
)


Deemed dividend to Series A preferred shareholders






(1,568
)






Net (loss) income available to ordinary
    shareholders(4)


(274
)


25,885



139,122



70,223(Loss) earnings per ordinary
    share(4)(5)Basic

$
(0.01
)

$
0.35


$
1.50


$
0.67Diluted

$
(0.01
)

$
0.35


$
1.37


$
0.64(Loss) earnings per ADSBasic

$
(0.01
)

$
0.35


$
1.50


$
0.67Diluted

$
(0.01
)

$
0.35


$
1.37


$
0.64Ordinary shares used in
    computation(5)Basic


75,000



75,000



92,674



104,994Diluted


75,000



75,000



104,859



109,240     (1)
    
    Gross profit for the years ended
    December 31, 2006, 2007 and 2008 reflected $174,000,
    $1,772,000 and $3,667,000 of share-based compensation expense
    allocated to cost of goods sold, respectively. 7




---



##### Table of Contents



(2)
    
    Income from operations for the
    years ended December 31, 2006, 2007 and 2008 reflected
    $2,028,000, $9,390,000 and $16,614,000 of share-based
    compensation expense, respectively.(3)
    
    Interest expense for the years
    ended December 31, 2006, 2007 and 2008 included $4,440,000,
    nil and nil related to debt discount amortization for the
    embedded beneficial conversion feature of our exchangeable notes
    issued in July 2006, and nil, nil and $10,204,000 related to
    interest and the amortization of issuance costs of our
    convertible senior notes issued in April 2008. See note 14
    to our audited consolidated financial statements beginning on
    page F-1.(4)
    
    Our PRC subsidiary, Jiangxi LDK
    Solar, is entitled to exemption from PRC national enterprise
    income tax for at least two years and PRC local enterprise
    income tax for at least five years, each beginning with calendar
    year 2006. Without this tax holiday, our income tax expense
    would have increased and our net income and net income available
    to ordinary shareholders would have been reduced by
    approximately $12,387,000, $53,316,000 and $5,897,000 for the
    years ended December 31, 2006, 2007 and 2008, respectively.
    Our basic earnings per share would have been reduced by $0.17,
    $0.58 and $0.06 for the years ended December 31, 2006, 2007
    and 2008, respectively, and our diluted earnings per share would
    have been reduced by $0.17, $0.51 and $0.05 for the years ended
    December 31, 2006, 2007 and 2008, respectively.(5)
    
    All share and per share data have
    been presented to give retrospective effect to our
    reorganization as described above.    As of December 31,2005

2006

2007

2008(In thousands)Consolidated Balance Sheet DataCash and cash equivalents

$
9,687


$
30,227


$
83,470


$
255,523Inventories






94,886



349,997



616,901Prepayments to suppliers, net






37,718



138,193



71,214Trade accounts receivable






1,490



3,767



94,733Total current assets


20,815



172,746



741,748



1,237,642Property, plant and equipment, net


10,491



100,875



336,763



1,697,203Deposits for property, plant and equipment


306



11,090



151,233



233,296Inventories to be processed beyond one year, net










29,981



Prepayments to suppliers expected to be utilized beyond one year










18,994



33,617Total assets


31,647



292,719



1,309,986



3,373,728Short-term bank borrowings






56,765



264,101



666,200Advance payments from customers, current portion


3,717



40,002



141,223



256,411Total current liabilities


20,348



117,486



522,014



1,510,955Advance payments from customers  noncurrent










67,554



487,577Long-term bank borrowings, excluding current portion






30,245



25,125



154,252Convertible senior notes














400,000Total liabilities


20,348



147,733



616,915



2,597,820Series A, Series B and Series C preferred shares






87,744







Total shareholders equity

$
11,299


$
57,242


$
693,071


$
775,908  8




---



##### Table of Contents



Period from July 5to December 31,

Year Ended December 31,2005

2006

2007

2008(In thousands)Consolidated Statement of Cash Flows DataNet cash provided by (used in) operating activities

$
2,511


$
(57,067
)

$
(80,663
)

$
333,061Net cash used in investing
    activities(1)


(20,940
)


(79,564
)


(328,623
)


(1,247,174
)Net cash provided by financing
    activities(2)

$
28,077


$
154,891


$
462,324


$
1,087,698     (1)
    
    Includes purchase of property,
    plant and equipment of approximately $15.5 million,
    $72.8 million, $305.2 million and
    $1,125.6 million in 2005, 2006, 2007 and 2008, respectively.(2)
    
    Includes proceeds from the issuance
    of our shares of nil, $10,000, $369.5 million and
    $205.1 million in 2005, 2006, 2007 and 2008, respectively
    and the net proceeds from the issuance of convertible senior
    notes of $388.7 million in 2008.    Period from July 5

Year Ended December 31,to December 31, 2005

2006

2007

2008Other Financial and Operating DataGross
    margin(1)






39.3
%


32.5
%


5.4
%Operating
    margin(1)






35.2



28.0



0.5Net
    margin(1)






28.6
%


27.5
%


4.3
%Net sales of wafers (in thousands)





$
102,452


$
501,733


$
1,495,034Wafers sold (in MW)






45.2



223.8



817.8Average wafer selling price (per watt)





$
2.27


$
2.24


$
2.35     (1)
    
    Gross margin, operating margin and
    net margin represent gross profit, income from operations and
    net income, respectively, divided by net sales. B.  Capitalization
    and Indebtedness   C.  Reasons
    for the Offer and Use of Proceeds   D.  Risk
    Factors  Investment in our securities including our ADSs and shares
    involves a high degree of risk. You should consider carefully
    the following risks and uncertainties, together with other
    information contained in this report, before you decide whether
    to buy or hold our securities.
  Risks
    Relating to Our Company and Our Industry
  Our
    operating history is short and may not provide you with an
    adequate basis upon which to evaluate our business and
    prospects.
   9




---



##### Table of Contents



If we
    are not able to manage our growth effectively, our results of
    operations may be adversely affected.
    We may
    develop excess production capacity and, as a result, our
    profitability may be adversely affected.
    Global
    supply for PV products may exceed demand, which could cause our
    wafer prices to decline and adversely affect our margins and net
    realizable value of our inventories.
   10




---



##### Table of Contents



We
    depend on a limited number of customers for a significant
    portion of our net sales, and changes in their purchase terms or
    patterns may cause significant fluctuations or declines in our
    revenues.
  E-Ton E-Ton,
    
    reductions, delays or cancellations of purchase orders from one
    or more of our significant customers;
    loss of one or more of our significant customers and our failure
    to identify additional or replacement customers; and
    failure of any of our significant customers to make timely
    payments for our products.    Current global economic slowdown, crisis in the global
    financial markets and the volatility of petroleum prices have
    negatively impacted, and may continue to negatively impact, our
    business and our ability to obtain necessary financing for our
    operations.
   11




---



##### Table of Contents




    the uncertain economic prospect and tightened credit markets
    have resulted in a lower demand for our solar wafers, more
    requests from customers for delay in our wafer shipments, and an
    increase in our accounts receivable;
    the declining wafer prices have caused a decline in our sales
    revenue, a decline in our profit margin and a write-down of our
    inventories; and
    the delays (voluntary or at our request) or defaults by our
    suppliers in shipment of our contracted feedstock and equipment
    have either prolonged our exposure with respect to the
    prepayments we made to the suppliers or led to provisions that
    we have to make for doubtful recoveries.      We
    require a significant amount of cash to fund our future capital
    expenditure requirements and working capital needs; if we cannot
    obtain additional sources of liquidity when we need it, our
    growth prospects and future profitability may be materially
    adversely affected.
   12




---



##### Table of Contents




    our future financial condition, results of operations and cash
    flows;
    general market conditions for financing activities by companies
    in our industry;
    economic, political and other conditions in China and
    elsewhere; and
    development and duration of the current global economic slowdown
    and financial market crisis.    We
    have substantial existing indebtedness and may incur substantial
    indebtedness in the future, which could adversely affect our
    financial condition and our ability to generate sufficient cash
    to satisfy our outstanding and future debt
    obligations.
    
    increase our vulnerability to adverse general economic and
    industry conditions;
    require us to dedicate a substantial portion of our cash flow
    from operations to servicing and repaying indebtedness, thereby
    reducing the availability of cash flow to fund working capital,
    capital expenditures, dividend payments and other general
    corporate purposes;
    limit our flexibility in planning for or reacting to changes in
    the businesses and the industries in which we operate;
    place us at a competitive disadvantage compared to those
    competitors which have less debt;
    limit, along with the financial and other restrictive covenants
    of such indebtedness, our ability to borrow additional
    funds; and
    increase the cost of additional financing.     13




---



##### Table of Contents



Our
    customers may not prepay for their orders.
    Failure
    to secure sufficient quantities of polysilicon feedstock on
    commercially reasonable terms could adversely affect our
    business and results of operations.
    There
    are a limited number of suppliers of virgin polysilicon
    feedstock and failure or delay by any of our polysilicon
    suppliers in delivering supplies to us could adversely impact
    our production and delivery schedule and harm our
    reputation.
   14




---



##### Table of Contents



Failure
    to complete our polysilicon production plant and bring it up to
    full operation within budget and on schedule could adversely
    affect our results of operations and our business expansion
    strategies.
  start-up,
  
    the need to procure additional equipment at reasonable cost and
    on a timely basis;
    the need to raise additional funds to finance the construction
    and ramp-up
    of the polysilicon plant, which we may be unable to obtain on
    reasonable terms or at all;
    construction delays, delays in equipment deliveries and cost
    overruns;
    our ability to install and implement the trichlorosilane, or
    TCS, and hydrogen chloride, or HCI, facilities and closed-loop
    systems for each of our polysilicon manufacturing factories; 15




---



##### Table of Contents




    difficulties in recruiting and training additional skilled
    employees, including technicians and managers at different
    levels;
    diversion of significant management attention and other
    resources; and
    delays or denials of required approvals, including environmental
    approvals, for our land acquisition and plant construction by
    relevant government authorities.  ramp-up
  We may
    not succeed in producing polysilicon
    cost-effectively.
      The
    manufacture of polysilicon presents operational difficulties and
    dangers which could materially adversely affect our business,
    operating results and financial condition.
   16




---



##### Table of Contents



We may
    not be able to complete our hydrogenation process and in-house
    TCS production facilities within our expected timeframe and
    budget, or at all, and in-house TCS production may not be more
    cost-efficient
    than purchasing TCS from third party suppliers.
  top-up
  We may
    not be able to significantly increase our wafer production
    capacity or output in order to increase our sales and gain
    additional market share.
      
    the need to procure additional wafer production equipment at
    reasonable cost and on a timely basis;
    the need to procure sufficient supplies of polysilicon
    feedstock, consumables and other materials at reasonable cost
    and on a timely basis;
    the need to raise additional funds to finance our purchase of
    additional polysilicon feedstock and equipment and the
    construction of additional manufacturing facilities, which we
    may be unable to obtain on reasonable terms or at all;
    construction delays and cost overruns;
    difficulties in recruiting and training additional skilled
    employees, including technicians and managers at different
    levels;
    diversion of significant management attention and other
    resources; and
    delays or denials of required approvals for our land acquisition
    and plant construction, including environmental approvals, by
    relevant government authorities.   17




---



##### Table of Contents



We do
    not yet have NDRC approval for the full capacity of our
    polysilicon production plant and failure to obtain such approval
    could adversely affect our growth and
    profitability.
    Reduction
    or elimination of government subsidies and economic incentives
    for the solar power industry could cause demand for our products
    to decline, thus adversely affecting our business prospects and
    results of operations.
    We
    operate in a competitive market against players with greater
    resources and more advanced technologies and we may not be able
    to compete successfully.
  Sino-American Sino-American
 18




---



##### Table of Contents



and/or and/or
      We
    rely on a limited number of suppliers for our production
    equipment and consumables, and failure or delay by any of them
    in delivering equipment or consumables to us could adversely
    impact our production.
   19




---



##### Table of Contents



If we
    are unable to fulfill our commitments to customers or customer
    orders on a timely basis, we may lose customers, our reputation
    may be damaged, and we may face penalties for breach of
    contracts.
    We are
    subject to several securities class action lawsuits resulting
    from allegations of accounting problems made by our former
    financial controller and, we are unable to quantify their
    eventual impact, if any, on us. These lawsuits or any similar or
    other allegations, lawsuits or proceedings in the future could
    adversely affect our results of operations, financial condition
    and reputation and may cause loss of business.
  No. C07-05182
   20




---



##### Table of Contents



Our
    business depends on the continued services of our executive
    officers and key personnel and our business may be severely
    disrupted if we lose their services.
    Our
    principal shareholder, Mr. Xiaofeng Peng, has substantial
    control over our company and his interests may not be aligned
    with the interests of our shareholders; Mr. Peng is engaged
    in a thin-film solar project and has pledged a significant
    portion of his equity interests in our company to finance his
    investment in the project and may pledge or sell additional
    equity in our company for such purpose.
   21




---



##### Table of Contents



and/or
  If
    solar power is not adopted for wide commercial application, our
    revenues may decline and we may be unable to sustain our
    profitability.
    
    cost-effectiveness, performance and reliability of solar power
    technology and products compared to conventional and other
    renewable energy sources and products;
    availability of government subsidies and economic incentives to
    support the development of the solar power industry;
    success of, or increased government support for, other
    alternative energy generation technologies, such as fuel cells,
    wind power, hydroelectric power and biomass energy;
    fluctuations in economic and market conditions that affect the
    viability of renewable energy sources, such as increases or
    decreases in the prices of oil and other fossil fuels;
    deregulation of the electric power industry and the broader
    energy industry; and
    levels of capital expenditures by end-users of solar energy
    products, which tend to decrease when economic growth slows.    Technological
    changes in the solar power industry could render our products
    uncompetitive or obsolete, which could reduce our market share
    and cause our net sales and profits to decline.
   22




---



##### Table of Contents



Unexpected
    equipment failures or accidents, including the release of
    hazardous materials, may lead to production curtailments or
    shutdowns, personal injuries or damage to
    properties.
    Our
    strategy includes possible alliances and acquisitions and our
    failure to successfully implement this strategy could have a
    material adverse effect on our business.
    Product
    defects could result in increased costs, damage to our
    reputation and loss of revenues and market share.
   23




---



##### Table of Contents



We are
    subject to the management report and auditor attestation report
    requirements of Section 404 of the Sarbanes-Oxley Act; if
    we fail to maintain an effective system of internal control over
    financial reporting, we may be unable to accurately report our
    financial results or prevent fraud, and investor confidence and
    the market price of our ADSs may be adversely
    affected.
  Form 20-F
    If we
    are unable to attract, train and retain technicians and a
    skilled labor force, our business may be materially adversely
    affected.
   24




---



##### Table of Contents



Fluctuations
    in exchange rates could adversely affect our
    business.
        Compliance
    with environmental and safety regulations is expensive, and
    noncompliance may result in adverse publicity and potentially
    significant monetary damages and fines or suspension of our
    business operations.
     25




---



##### Table of Contents



We
    have limited insurance coverage and may incur losses resulting
    from product liability claims or business
    interruptions.
    Increases
    in electricity costs or shortage or interruption of electricity
    supply may adversely affect our operations.
  kilowatt-hour. kilowatt-hour, kilowatt-hour kilowatt-hour kilowatt-hour, kilowatt-hour
   26




---



##### Table of Contents



Failure
    to protect our intellectual property rights, know-how and
    technology may undermine our competitive position.
  and/or
  We may
    be exposed to infringement, misappropriation or other claims by
    third parties and an adverse determination could result in us
    paying significant damages.
    We
    have granted, and may continue to grant, stock options under our
    stock incentive plan and our net income could be adversely
    impacted.
   27




---



##### Table of Contents



Most
    of our production, storage, administrative and research and
    development facilities are located in close proximity to one
    another in Xinyu city of Jiangxi province. Any damage or
    disruption at these facilities would have a material adverse
    effect on our business, financial condition and results of
    operations.
    Risks
    Relating to Business Operations in China
  Changes
    in PRC political and economic policies and conditions could
    adversely affect our business and prospects.
    Changes
    in foreign exchange and foreign investment regulations in China
    may affect our ability to invest in China and the ability of our
    PRC subsidiaries to pay dividends and service debts in foreign
    currencies.
   28




---



##### Table of Contents



The
    uncertain legal environment in China could have a negative
    impact on our business and prospects and also limit the legal
    protections available to you.
    Expiration
    of, or changes to, current PRC tax incentives that our business
    enjoys could have a material adverse effect on our results of
    operations.
    
    a two-year exemption from the national enterprise income tax
    from their first profitable year; and
    a 50% reduction of their applicable national enterprise income
    tax rate for the succeeding three years.   29




---



##### Table of Contents




    a five-year exemption from the 3% local enterprise income tax
    from their first profitable year; and
    a 50% reduction of their local enterprise income tax rate for
    the succeeding five years.      Our
    business, financial condition and results of operations could be
    adversely affected by the PRC labor laws and
    regulations.
    We may
    be deemed a PRC resident enterprise under the new PRC Enterprise
    Income Tax Law and be subject to the PRC taxation as to our
    worldwide income.
   30




---



##### Table of Contents



Dividends
    payable by us to our foreign investors and gains on the sale of
    our shares or ADSs may become subject to withholding taxes under
    PRC tax laws.
    We
    rely principally on dividends, if any, paid by our subsidiaries
    to fund our cash and financing requirements, and any limitation
    on the ability of our PRC subsidiaries to pay dividends to us
    could have a material adverse effect on our ability to conduct
    our business.
   31




---



##### Table of Contents



Recent
    PRC regulations relating to the establishment of offshore
    special purpose companies by PRC residents may subject our PRC
    resident shareholders to personal liability and limit our
    ability to acquire PRC companies or to inject capital into our
    PRC subsidiaries, limit our PRC subsidiaries ability to
    distribute profits to us, or otherwise materially adversely
    affect us.
    We
    face risks related to health epidemics and other outbreaks of
    contagious diseases, including influenza A (H1N1), avian flu and
    SARS.
   32




---



##### Table of Contents



Risks
    Relating to Our ADSs and Shares
  The
    market price of our ADSs has been and may continue to be
    volatile.
      
    announcements of technological or competitive developments;
    regulatory developments in our target markets affecting us, our
    customers, suppliers or competitors;
    announcements regarding patent litigation or the issuance of
    patents to us or our competitors;
    announcements of studies and reports relating to the conversion
    efficiencies of our products or those of our competitors;
    actual or anticipated fluctuations in our quarterly operating
    results or those of our suppliers, customers or competitors;
    changes in financial estimates or other material comments by
    securities analysts relating to us, our suppliers, customers or
    competitors, or our industry in general;
    announcements by other companies in our industry relating to
    their operations, strategic initiatives, financial condition or
    financial performance;
    announcements of acquisitions or consolidations involving
    industry competitors or industry suppliers or customers;
    changes in the economic performance or market valuations of
    other PV technology companies;
    addition or departure of our executive officers and key research
    personnel;
    sales or perceived sales of additional shares or ADSs by us or
    our significant shareholders; and
    impact and development of any lawsuit, currently pending or
    threatened, or that may be instituted in the future.    We may
    not be able to pay any dividends on our shares and
    ADSs.
   33




---



##### Table of Contents



Future
    financings, including sales of our ADSs, shares or equity-linked
    securities in the public market, may cause a dilution in your
    shareholding, cause the price of our ADSs to decline, or place
    restrictions on our operations.
      
    limit our ability to pay dividends or require us to seek
    consents for the payment of dividends;
    increase our vulnerability to general adverse economic and
    industry conditions;
    limit our ability to pursue our business strategies;
    require us to dedicate a substantial portion of our cash flow
    from operations to service our debt, thereby reducing the
    availability of our cash flow to fund capital expenditure,
    working capital requirements and other general corporate
    needs; and
    limit our flexibility in planning for, or reacting to, changes
    in our business
    and/or our
    industry.  Holders
    of ADSs have fewer rights than shareholders and must act through
    the depositary to exercise those rights.
    You
    may be subject to limitations on transfers of your
    ADSs.
   34




---



##### Table of Contents



You
    may not receive distributions on shares or any value for them if
    it is unlawful or impractical to make them available to
    you.
    You
    may not be able to participate in rights offerings or elect to
    receive stock dividends and may experience dilution of your
    holdings, and the sale, deposit, cancellation and transfer of
    our ADSs issued after exercise of rights may be
    restricted.
    Anti-takeover
    provisions of our articles of association could prevent a change
    in control even if such takeover is beneficial to our
    shareholders, and certain provisions of our convertible senior
    notes could also discourage an potential acquirer.
    Form F-3 333-152009)
 35




---



##### Table of Contents



We are
    a Cayman Islands company and, because judicial precedent
    regarding the rights of shareholders is more limited under
    Cayman Islands law than that under U.S. law, ADS holders may
    have less protection for their shareholder rights than such
    holders would under U.S. law.
        
    to recognize or enforce against us judgments of courts of the
    United States based on certain civil liability provisions of
    U.S. securities laws; and
    to impose liabilities against us, in original actions brought in
    the Cayman Islands, based on certain civil liability provisions
    of U.S. securities laws that are penal in nature.      You
    may have difficulty enforcing judgments obtained against
    us.
   36




---



##### Table of Contents



We
    incur significant costs as a result of being a public
    company.
    ITEM 4.
    INFORMATION
    ON THE COMPANY A.  History
    and Development      790) 686-0171. www.ldksolar.com.
   37




---



##### Table of Contents



B.  Business
    Overview               38




---



##### Table of Contents



Competitive
    Strengths
    Leading
    solar wafer manufacturer
    Cost-effective
    production
    
    Efficient Production Process.  We have taken a
    series of cost reduction measures and developed processing
    technologies to reduce our production costs at each step of the
    production process, which include recycling more polysilicon,
    producing bigger ingots, increasing wafer size, reducing wafer
    thickness, recovering slurry and increasing production yield.
    China-based Manufacturing Facilities.  By
    manufacturing all of our products in China, we are able to
    benefit from low-cost labor, land, ancillary equipment and
    facilities, consumables and utilities. The low-cost labor in
    China allows us to utilize, in a cost-effective manner,
    recyclable polysilicon feedstock that requires intensive labor
    in its sorting, inspection and preparation. We have also made a
    33.5% investment in a local crucibles manufacturer, located in
    Xinyu city, the same city as our wafer manufacturing facilities.
    This investment enables us to secure a large portion of the
    crucibles we need for our anticipated wafer production in the
    upcoming years at a low cost. Crucibles are used to create
    ingots, and are currently one of the most expensive consumables
    used in the wafer manufacturing process.
    Research and Development.  Our research and
    development efforts are aimed at achieving both near-term
    production process efficiency improvements and long-term
    technological breakthroughs through our collaboration with
    leading universities and our internal resource. Our efforts have
    enabled us to diversify and optimize our polysilicon feedstock
    mix, to manufacture larger ingots and thinner and larger wafers.
    We have established dedicated laboratories in collaboration with
    two universities in China, Shanghai Jiaotong University and
    Nanchang University. Our cooperation with Shanghai Jiaotong
    University is aimed at enhancing the performance of consumables
    sourced in China such as crucibles, slurry and sawing wires as
    well as to develop innovative equipment and technologies to
    improve our manufacturing processes. Our cooperation with
    Nanchang University is focused on producing lower-cost
    consumables and reducing the cost of utilizing locally procured
    consumables in our manufacturing process.  Large-scale
    wafer manufacturer utilizing state-of-the-art
    equipment
   39




---



##### Table of Contents



Strong
    relationships with customers and suppliers
  E-Ton,
  Experienced
    management team
    Our
    Strategies
    Expand
    our production capacity to meet customer demand and enhance
    economies of scale
  and/or
  Continue
    to improve our research and development to reduce manufacturing
    costs, improve production yield and pursue technological
    innovation
   40




---



##### Table of Contents




    maximize the utilization of polysilicon by making larger ingots
    and thinner wafers;
    improve technologies used in our polysilicon and slurry recovery
    program;
    improve production output by making thinner and larger wafers;
    reduce the costs associated with consumable items, such as
    sawing wires, crucibles and slurry;
    rely more on our in-house polysilicon feedstock as we ramp up
    our production capacity; and
    utilize more low-cost raw materials by improving our processing
    technology.    Develop
    our in-house polysilicon manufacturing
    capabilities
    Secure
    supplies of polysilicon feedstock from third-party
    vendors
    Broaden
    our geographic presence and strengthen our customer
    relationships
   41




---



##### Table of Contents



Consider
    selective alliances and acquisitions
    Our
    Products
      Multicrystalline
    Wafer Production
    
    ingot production, and
    wafering.    Production
    of Polysilicon Ingot
    Wafering
     42




---



##### Table of Contents



Materials
    used in our multicrystalline wafer production
  Polysilicon Feedstock.
  Crucibles.
  Slurry and Wire.
  Multicrystalline
    wafer production facilities
    Hi-Tech
  
    328 DSS furnaces used for ingot production;
    63 squarers used to cut ingots into blocks;
    200 wire saws used to slice blocks into wafers; and
    other supplemental or ancillary facilities.      Wafering
    technologies
   43




---



##### Table of Contents



Monocrystalline
    Wafer Production
      Polysilicon
    Production
  top-up
  Polysilicon
    production process
   44




---



##### Table of Contents



Polysilicon
    production technologies
    Polysilicon
    production facilities
  Xinyu Hi-Tech
  
    two Siemens technology-based reactors from Sunways AG, or
    Sunways; and
    other ancillary polysilicon production equipment.  top-up
   45




---



##### Table of Contents



Quality
    Control
        Customers,
    Sales and Marketing
  Q-Cells Q-Cells,
 46




---



##### Table of Contents




    In March 2006, we entered into a five-year solar wafer supply
    agreement with Solland Solar, commencing on January 1, 2006
    through December 31, 2010 and automatically renewable at
    one-year increments.
    In August 2007, we entered into a three-year contract to supply
    multicrystalline solar wafers to Taiwan-based Chuan-Yi
    Investment Corporation, or Chuan-Yi. Under the terms of the
    contract, we will deliver approximately 246 MW of
    multicrystalline solar wafers to Chuan-Yi over a three-year
    period.
    In August 2007, we entered into a contract to supply
    multicrystalline solar wafers to Neo Solar. Under terms of the
    agreement, we will deliver approximately 237 MW of
    multicrystalline solar wafers to Neo Solar through the end of
    2009.
    In September 2007, we entered into a wafer supply contract to
    supply multicrystalline solar wafers to Sunways. Under the terms
    of the contract, we will deliver approximately 1.0 GW of
    multicrystalline solar wafers to Sunways over a
    10-year
    period starting in 2008.
    In December 2007, we entered into a
    10-year
    contract to supply multicrystalline wafers to Q-Cells, pursuant
    to which we will deliver more than 6.0 GW of multicrystalline
    solar wafers to Q-Cells over a
    10-year
    period commencing in 2009 through 2018. We will use
    approximately one-third of the polysilicon produced by our
    15,000-metric-ton polysilicon production facility to manufacture
    the wafers to be delivered under this contract. Q-Cells has
    agreed to make certain prepayments to assists us in financing
    the expansion required to supply these volumes. Additionally,
    Q-Cells has the option to purchase further silicon wafers if we
    expand our polysilicon production capacity.
    In January 2008, we entered into a
    10-year
    contract to supply multicrystalline solar wafers to Neo Solar.
    Under the contract, we will receive a cash deposit from Neo
    Solar and the pricing will remain fixed for the entire contract
    period. We will deliver approximately 509 MW of
    multicrystalline solar wafers to Neo Solar commencing in 2009.
    In January 2008, we entered into a five-year contract to supply
    wafers to Qimonda AG based in Germany, subsequently assigned to
    Itarion Solar, Lda. based in Portugal. Under the contract, as
    amended, we will deliver approximately 540 MW of
    multicrystalline wafers from 2009 to 2013.
    In February 2008, we entered into an eight-year contract to
    supply multicrystalline solar wafers to Hyundai based in the
    Republic of Korea. Under the terms of the agreement, we will
    deliver 450 MW of multicrystalline solar wafers to Hyundai
    over an eight-year period commencing in late 2008 through 2015.
    Hyundai will make an advanced payment representing a portion of
    the contract value to us.
    In March 2008, we entered into an agreement to supply
    multicrystalline solar wafers to Petro International. Under the
    terms of the agreement, we will deliver approximately
    120 MW of multicrystalline solar wafers to Petro
    International over a three-year period commencing in March 2008
    through March 2011.
    In April 2008, we entered into a
    10-year
    contract to supply multicrystalline solar wafers to Moser Baer
    Photo Voltaic Ltd., or MBPV, based in India. Under the terms of
    the contract, we will deliver approximately 640 MW of
    multicrystalline solar wafers to MBPV over a period commencing
    in the second half of 2008 through the end of 2017. MBPV will
    make an advance payment representing a portion of the contract
    value to us.
    In June 2008, we entered into two
    10-year
    contracts to supply wafers to CSI. Under these contracts, we
    will deliver an aggregate of approximately 800 MW of
    multicrystalline wafers to two subsidiaries of CSI.
    In July 2008, we entered into a
    10-year
    contract to supply wafers to Photovoltech NV, or Photovoltech,
    based in Belgium. Under the contract, we will deliver
    approximately 400 MW of multicrystalline wafers to
    Photovoltech during the term of the contract. In addition, at
    Photovoltechs option, we will supply up to an additional
    290 MW of multicrystalline wafers to Photovoltech during
    the last five years of the contract. 47




---



##### Table of Contents




    In August 2008, we entered into a five-year contract to supply
    wafers to XL Telecom & Energy Limited based in India.
    Under the contract, we will delivery approximately 300 MW
    of multicrystalline wafers during the term of the contract.
    In August 2008, we entered into a seven-year contract to supply
    wafers to Hyundai based in Korea. Under the contract, we will
    supply approximately 440 MW of multicrystalline wafers
    during 2009 through 2015.
    In August 2008, we entered into a five-year contract to supply
    wafers to Solartech Energy based in Taiwan. Under the contract,
    we will deliver approximately 550 MW of multicrystalline
    wafers during the term of the contract.
    In September 2008, we entered into an eight-year contract with
    Sumitomo Corporation to supply multicrystalline wafers, ingot or
    polysilicon to a leading manufacturer of solar cells and modules
    in Japan. Under the contract, we will deliver an aggregate of
    approximately 750 MW of multicrystalline wafers, ingot or
    polysilicon from April 2009 to December 2016.
    In September 2008, we entered into an
    11-year
    processing service agreement with Q-Cells to process upgraded
    metallurgical grade, or UMG, solar-grade silicon into wafers.
    Pursuant to the agreement, we will process a minimum of 20,050
    metric tons of UMG solar-grade silicon from September 2008 to
    December 2018. Q-Cells has an option under the agreement for us
    to process an additional 21,050 metric tons of UMG solar-grade
    silicon during the term of this agreement. Under this agreement,
    Q-Cells will pay us a processing fee that is subject to further
    negotiation between the parties. In addition, concurrent with
    this agreement, we and Q-Cells entered into a memorandum of
    understanding, pursuant to which we have agreed to supply
    Q-Cells with
    additional multicrystalline solar wafers in quantities
    equivalent to the wafers delivered by us under the
    11-year
    processing service agreement during the period from 2009 to
    2018. The memorandum of understanding for the additional supply
    of wafers and the terms, including prices, are subject to
    further negotiations between the parties.


    In November 2008, we entered into a three-year contract to
    supply multicrystalline solar wafers to BP Solar. Under the
    terms of the agreement, we will deliver approximately
    435 MW of multicrystalline silicon solar wafers over a
    three-year period, commencing in 2009 and extending through 2011.       48




---



##### Table of Contents



Suppliers
  Raw
    materials and consumables
      
    semiconductor materials trading companies, such as Komex, Petro
    International, Sunbridge and Targray;
    solar cell and module makers, such as BP Solar, CSI, GE Energy
    and Q-Cells; and
    solar-grade virgin polysilicon manufacturers, such as Wacker.          
    Our framework silicon purchase contract with Komex entered into
    in December 2006 has a term of eight years from January 2007 to
    January 2015. Pursuant to the contract, Komex is required to
    supply at least 35 tons of solar-grade polysilicon feedstock to
    us at market prices for each month during the term of the
    contract. The Komex contract provides for a monthly delivery
    schedule and we are required to pay 100% of the purchase price
    in advance for each shipment.
    Our cooperation agreement with Kunical International Group Ltd.,
    or Kunical, entered into in December 2006 has a term of four
    years from 2007 to 2010. Pursuant to this contract, Kunical is
    required to use its best efforts to supply to us 200 tons of
    polysilicon feedstock each year during the term of the contract
    for a total price of $96 million. Kunical is required to
    deliver polysilicon feedstock within seven business days upon
    receipt of our purchase order and we are required to pay 100% of
    the purchase price for each shipment five days after receipt of
    its invoice.
    Our framework agreement with Luoyang Zhonggui High-Tech Co.,
    Ltd, or Luoyang Zhonggui, entered into in April 2007 has a term
    of five years. Pursuant to this agreement, Luoyang Zhonggui is
    to supply 200 tons of polysilicon feedstock in 2008, 400 tons in
    2009, 800 tons in 2010, 1,000 tons in 2011 and 1,500 tons in
    2012. The purchase price will be based on prevailing PRC
    domestic market prices. Luoyang Zhonggui supplied us
    approximately 40 tons of polysilicon feedstock in 2008.
    In March 2008, we entered into a polysilicon feedstock supply
    agreement with Petro International. Pursuant to this agreement,
    Petro International will provide us with an aggregate of 1,449
    metric tons of polysilicon feedstock, to be delivered from March
    2008 through February 2011. We have agreed to pay a deposit of
    2% of the aggregate contract price. Delivery of the feedstock
    will be on a monthly basis and we are required to pay 100% of
    the purchase price in advance of each shipment. 49




---



##### Table of Contents



Equipment
      
    569 additional DSS furnaces from GT Solar and JYT Corporation;
    193 additional wafering wire saws from Applied Materials;
    74 additional squarers from Applied Materials;
    66 additional polysilicon reactors and 29 converters from GT
    Solar and M.S.A Apparatus Construction for Chemical Equipment
    Ltd; and
    other ancillary equipment.       50




---



##### Table of Contents



Competition
    Sino-American
 51




---



##### Table of Contents



and/or and/or
    
    cost competitiveness and price;
    continuous access to polysilicon feedstock;
    product quality;
    economies of scale;
    advanced technology and manufacturing processes; and
    strong global distribution channels.      Property
    Owned
    property
    Leased
    property
   52




---



##### Table of Contents



Insurance
    Production
    Safety and Environment
    Safety
      Environment
  on-site
    Regulatory
    Framework
   53




---



##### Table of Contents



Renewable
    Energy Law and Government Directives
          Environmental
    Regulations
    Restriction
    on Foreign Investments
    Tax
   54




---



##### Table of Contents



Foreign
    Currency Exchange
   55




---



##### Table of Contents



Dividend
    Distribution
    
    Company Law of 1993, as amended;
    Wholly Foreign-owned Enterprise Law of 1986, as amended;
    Wholly Foreign-owned Enterprise Law Implementation Rules of
    1990, as amended;
    Equity Joint Venture Enterprise Law of 1979, as amended; and
    Equity Joint Venture Enterprise Law Implementation Rules of
    1983, as amended.    Regulation
    of Overseas Investments and Listings
       56




---



##### Table of Contents




    CSRC currently has not issued any definitive rule or
    interpretation requiring offerings like our IPO to be subject to
    its new procedures; and
    In spite of the above, because we completed our restructuring
    and established an overseas holding structure before the
    M&A rule came into effect, neither the M&A rule nor
    the CSRC approval procedures require an application to be
    submitted to CSRC for the approval of the listing and trading of
    our ADSs on the New York Stock Exchange unless we are clearly
    required to do so by possible later rules of CSRC.  C.
    Organizational
    Structure     57




---



##### Table of Contents



D.
    Property,
    Plants and Equipment    ITEM 4A.
    UNRESOLVED
    STAFF COMMENTS    ITEM 5.
    OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS  A.
    Operating
    Results  You should read the following discussion and analysis of our
    financial condition and results of operations in conjunction
    with the section entitled Item 3. Key
    Information  A. Selected Financial and Operating
    Data and our audited consolidated financial statements
    included in this report beginning on
    page F-1.
    The following discussion and analysis contain forward-looking
    statements that involve risks and uncertainties. Our actual
    results and the timing of selected events could differ
    materially from those anticipated in these forward-looking
    statements as a result of various factors, including those set
    forth under Item 3. Key Information  D.
    Risk Factors and elsewhere in this report.
  Overview
   58




---



##### Table of Contents



Key
    Factors Affecting Our Results of Operations
    
    demand for our solar power products, including government
    incentives to promote the usage of solar energy;
    our production capacity and its utilization;
    the availability, cost, quality and mix of our polysilicon
    feedstock;
    our ability to produce polysilicon feedstock at our polysilicon
    manufacturing plant in sufficient quantities cost-efficiently;
    our manufacturing costs; and
    the pricing of our products.  Demand
    for our solar products
   59




---



##### Table of Contents



Our
    production capacity and its utilization
    Availability,
    cost, quality and mix of our polysilicon feedstock
      Our
    ability to produce polysilicon feedstock at our polysilicon
    manufacturing plant
   60




---



##### Table of Contents



Our
    manufacturing costs
    ramp-up
  Pricing
    of our wafer products
   61




---



##### Table of Contents



Net
    Sales
  and/or
  E-Ton,
    
    China;
    Asia Pacific ex-China;
    Europe; and
    North America.    Year Ended December 31,2007


2008Geographic Regions

Net Sales


% of Total


Net Sales


% of Total(In thousands)





(In thousands)China

$
154,224



29.4
%

$
463,101



28.2
%Asia Pacific ex-China


216,295



41.3



494,488



30.1Europe


105,499



20.1



614,671



37.4North America


47,928



9.2



71,235



4.3Net sales

$
523,946



100.0
%

$
1,643,495



100.0
%     Cost of
    Goods Sold
    
    polysilicon feedstock, including solar-grade virgin polysilicon,
    polysilicon ingots, polysilicon powder, scraps, recyclable
    polysilicon and various feedstock for polysilicon production
    (with the costs determined using the weighted average method);
    consumables, including slurry, crucibles, sawing wires and
    packaging materials; 62




---



##### Table of Contents




    depreciation and amortization of property, plant, equipment and
    technical know-how;
    factory overhead, including utilities, net of government
    subsidies, maintenance of production equipment and other support
    expenses associated with the manufacturing of our solar wafers
    and ingots;
    direct labor, including salaries and benefits of personnel
    directly involved in manufacturing activities;
    stock-based compensation attributable to our manufacturing
    personnel; and
    provisions for inventory write-downs due to product defects or
    decline in market prices for our inventories.    Operating
    Expenses
    Selling
    expenses
    General
    and administrative expenses
  ramp-up
  Research
    and development expenses
     63




---



##### Table of Contents



Share-based
    Compensation Expenses
    
    approximately $174,000, $1,772,000 and $3,667,000, respectively,
    to our cost of goods sold;
    approximately nil, $19,000 and $27,000, respectively, to our
    selling expenses;
    approximately $1,697,000, $5,828,000 and $12,609,000,
    respectively, to our general and administrative expenses;
    approximately $157,000, $1,771,000 and $311,000, respectively,
    to our research and development expenses; and
    approximately nil, $159,000 and nil, respectively, was
    capitalized in property, plant and equipment.    Other
    Income and Expenses
    Interest
    income or expense
      Foreign
    currency exchange gain/(loss), net
    Government
    subsidy
      Taxation
    and Incentives
   64




---



##### Table of Contents




    a two-year exemption from the national enterprise income tax
    from their first profitable year; and
    a 50% reduction of their applicable national enterprise income
    tax rate for the succeeding three years.    
    a five-year exemption from the 3% local enterprise income tax
    from their first profitable year; and
    a 50% reduction of their local enterprise income tax rate for
    the succeeding five years.       65




---



##### Table of Contents



Subsequent
    Event
    Critical
    Accounting Policies
    
    the reported amounts of our assets and liabilities;
    the disclosure of our contingent assets and liabilities at the
    end of each reporting period; and
    the reported amounts of revenues and expenses during each
    reporting period.    
    our selection of critical accounting policies;
    the judgment and other uncertainties affecting the application
    of such policies; and
    the sensitivity of reported results to changes in conditions and
    assumptions.    Depreciation
    and amortization
   66




---



##### Table of Contents



Impairment
    of long-lived assets
    Balance
    sheet classification for inventory
    Realization
    for inventory
   67




---



##### Table of Contents



Provision
    for doubtful recoveries on prepayment to suppliers
    Share-based
    compensation
      
    no material changes in the existing political, legal, fiscal and
    economic conditions in China;
    no major changes in the tax rates applicable to our subsidiary
    in China;
    our ability to retain competent management, key personnel and
    technical staff to support our ongoing operations; and
    no material deviation in industry trends and market conditions
    from economic forecasts.     68




---



##### Table of Contents



U.S.-listed
      Fair Value ofOrdinary SharesGrant Date

Number of Options

Exercise Price

at Grant DateAugust 1, 2006


5,893,900


$
4.45


$
4.37February 6, 2007


2,065,900



9.00



7.98April 17,
    2007(1)


100,000



9.00



25.00May 14,
    2007(2)


350,900



25.00



25.00May 31,
    2007(3)


100,000



9.00



27.00July 6,
    2007(4)


633,400



33.96



33.53October 17,
    2007(4)


200,000



9.00



44.75December 3,
    2007(4)(5)


734,500



29.55



32.30January 5,
    2008(4)(5)


60,000



43.81



43.30February 25,
    2008(4)(5)


10,000



31.05



32.46April 22,
    2008(4)(5)


33,000



33.57



32.75July 29,
    2008(4)(5)


10,000



32.70



34.99October 31,2008(4)(5)


60,000



18.06



18.19November 13,
    2008(4)


291,300



13.12



14.32January 15,
    2009(4)(5)


423,100



13.06



9.79April 16,
    2009(4)(5)


287,300


$
8.46


$
5.85     (1)
    
    Represents the 100,000 options
    granted on April 17, 2007 to Gang Wang, one of our
    directors. We estimated the fair value of our shares as of the
    grant date to be $25.00 per share, based on our preliminary
    discussions with the underwriters for our IPO regarding its
    possible price range.(2)
    
    Represents the 350,900 options
    authorized on April 17, 2007 granted to our employees. The
    exercise price for such options was $25.00, the low end of the
    price range as shown on the cover page of our preliminary IPO
    prospectus. The grant date of such options was May 14,
    2007, the date such exercise price was determined. We estimated
    the fair value of the shares on the grant date of such options
    to be $25.00 per share, the low end of the price range set forth
    on the cover page of the preliminary IPO prospectus.(3)
    
    Represents the 100,000 options
    authorized on April 17, 2007 granted to Mr. Louis T.
    Hsieh, who became our director on the date of our IPO. The
    exercise price for such options was $9.00 per share and the
    grant date of such options was the date of our IPO prospectus.
    We determined the fair value of our shares on such grant date to
    be the IPO price per share, which was $27.00.(4)
    
    Represents options granted to our
    directors and employees. The fair value of our shares on such
    grant date was based on the closing price of our ADSs listed on
    the New York Stock Exchange for the trading day prior to the
    grant date.(5)
    
    As a result of the significant
    decreases of our share prices amid the global economic slowdown
    and financial market crisis, we and some of our optionees agreed
    to cancel some of the previously granted, but not yet vested,
    stock options in lieu of newly granted options in January and
    April 2009 with similar terms at lower exercise prices.   69




---



##### Table of Contents



August 1,
    2006 grant
      price-to-earnings
    December 19,
    2006 valuation
    February 6,
    2007 grant
      Option
    grants on April 17, May 14 and May 31,
    2007
   70




---



##### Table of Contents



Option
    grants after July 1, 2007
    Embedded
    beneficial conversion feature of the convertible
    instruments
       71




---



##### Table of Contents




    WACC: WACC of 17% was applied. This was the combined result of
    the risk-free rate, market return rate, industry average beta,
    and our company-specific risk premium that reflects the risks
    associated with achieving the projections at various stages of
    development.
    Lack of Marketability Discount, or LOMD: Sallmanns considered
    both the option method and the quantitative marketability
    discount model to quantify the LOMD. Both methods provided
    similar results on LOMD, which decreased from 35% as at
    June 28, 2006, which was the commitment date of the
    issuance of our exchangeable notes, to 20% as at
    September 15, 2006, which was the commitment date of the
    issuance of our Series B preferred shares, and to 10% as at
    December 15, 2006, which was the commitment date of the
    issuance of our Series C preferred shares. The decrease in
    LOMD was primarily attributable to our achievements in company
    restructuring and fund raising, which increased our resources to
    carry through our IPO.      Convertible
    senior notes
        Prepaid
    forward contract
   72




---



##### Table of Contents



cost-to-carry
    Recently
    Issued Accounting Standards
  FAS 140-3, Accounting for Transfers of Financial Assets and
    Repurchase Financing Transactions FAS 140-3). FAS 140-3 FAS 140-3 FAS 140-3
  Business Combinations Noncontrolling Interests
    in Consolidated Financial Statements  an amendment to
    ARB No. 51 )
  14-1, Accounting for Convertible Debt Instruments that May be
    Settled in Cash Upon Conversion 14-1). 14-1 14-1 14-1
 73




---



##### Table of Contents



14-1,
  No. 07-5, Determining Whether an Instrument (or Embedded Feature)
    Is Indexed to an Entitys Own Stock EITF 07-5 EITF 07-5
  Individual
    Income Tax Withholding Obligation
    Results
    of Operations
   74




---



##### Table of Contents



Year
    ended December 31, 2008 compared with year ended
    December 31, 2007
  Year Ended December 31,2007


2008(In thousands)


(% of Net Sales)


(In thousands)


(% of Net Sales)Net sales

$
523,946



100.0
%

$
1,643,495



100.0
%Cost of goods sold


(353,709
)


(67.5
)


(1,555,139
)


(94.6
)Gross profit


170,237



32.5



88,356



5.4Selling expenses


(873
)


(0.2
)


(3,786
)


(0.2
)General and administrative expenses


(19,360
)


(3.7
)


(68,010
)


(4.2
)Research and development expenses


(3,202
)


(0.6
)


(7,570
)


(0.5
)Total operating expenses


(23,435
)


(4.5
)


(79,366
)


(4.9
)Income from operations


146,802



28.0



8,990



0.5Other income/(expenses):Interest income


4,109



0.8



5,875



0.4Interest expense and amortization of convertible senior notes
    issuance costs


(9,419
)


(1.8
)


(34,347
)


(2.1
)Decrease in fair value of warrants


2



0.0







Foreign currency exchange (loss)/gain, net


(1,654
)


(0.3
)


14,495



0.9Government subsidies


3,461



0.7



19,665



1.2Change in fair value of prepaid forward contracts










60,028



3.7Equity in income of an associate










704



0.0Others, net










(48
)


(0.0
)Earnings before income tax


143,301



27.4



75,362



4.6Income tax benefit/(expense)


758



0.1



(5,139
)


(0.3
)Net income


144,059



27.5



70,223



4.3Accretion of Series A preferred shares to redemption value


(860
)


(0.2
)






Accretion of Series B preferred shares to redemption value


(2,726
)


(0.5
)






Accretion of Series C preferred shares to redemption value


(1,351
)


(0.2
)






Net income available to ordinary shareholders

$
139,122



26.6
%

$
70,223



4.3
%   Net sales.
 75




---



##### Table of Contents



Year Ended December 31,2007


2008Product

Net Sales


% of Total


Net Sales


% of Total(In millions)





(In millions)156 x 156 mm wafers

$
408.1



77.9
%

$
1,347.2



82.0
%125 x 125 mm wafers


92.3



17.6



132.9



8.1150 x 150 mm wafers


1.3



0.2



14.9



0.9Processing of wafers on behalf of others


18.7



3.6



116.9



7.1Silicon materials


3.5



0.7



31.6



1.9Total net sales

$
523.9



100.0
%

$
1,643.5



100.0
%     Q-Cells.
    Year Ended December 31,2007


2008Geographic Regions

Net Sales


% of Total


Net Sales


% of Total(In millions)





(In millions)Mainland China

$
154.2



29.4
%

$
463.1



28.2
%Asia Pacific ex-Mainland-China


216.3



41.3



494.5



30.1Europe


105.5



20.1



614.7



37.4North America


47.9



9.2



71.2



4.3Total net sales

$
523.9



100.0
%

$
1,643.5



100.0
%    76




---



##### Table of Contents



Cost of goods sold.
    Year Ended December 31,2007


2008Product

Cost of Goods Sold


% of Total


Cost of Goods Sold


% of Total(In millions)





(In millions)156 x 156 mm
    wafers(1)

$
268.3



75.9
%

$
1,300.7



83.6
%125 x 125 mm wafers


68.5



19.4



130.9



8.4150 x 150 mm wafers


1.1



0.3



15.0



1.0Processing of wafers on behalf of others


13.1



3.7



83.4



5.4Silicon materials


2.7



0.7



25.1



1.6Total cost of goods sold

$
353.7



100.0
%

$
1,555.1



100.0
%     (1)
    
    Includes substantially all of the
    provision for inventory write-downs in 2008.  Gross profit.
    Operating expenses.
  Interest income and expense.
 77




---



##### Table of Contents



Foreign currency exchange (loss)/gain,
    net.
  Government subsidies.
  Change in fair value of prepaid forward
    contracts.
  Income tax expense.
  Net income.
  Net income available to ordinary
    shareholders.
  Earnings per ordinary share.
 78




---



##### Table of Contents



Year
    ended December 31, 2007 compared with year ended
    December 31, 2006
    Year Ended December 31,2006


2007(In thousands)


(% of Net Sales)


(In thousands)


(% of Net Sales)Net sales

$
105,454



100.0
%

$
523,946



100.0
%Cost of goods sold


(63,962
)


(60.7
)


(353,709
)


(67.5
)Gross profit


41,492



39.3



170,237



32.5Selling expenses


(286
)


(0.3
)


(873
)


(0.2
)General and administrative expenses


(3,771
)


(3.5
)


(19,360
)


(3.7
)Research and development expenses


(290
)


(0.3
)


(3,202
)


(0.6
)Total operating expenses


(4,347
)


(4.1
)


(23,435
)


4.5Income from operations


37,145



35.2



146,802



28.0Other income/(expenses):Interest income


105



0.1



4,109



0.8Interest expense and amortization of discount on exchangeable
    notes


(7,133
)


(6.7
)


(9,419
)


(1.8
)Decrease in fair value of warrants


9



0.0



2



0.0Foreign currency exchange loss, net


(1,325
)


(1.3
)


(1,654
)


(0.3
)Government subsidy


1,268



1.2



3,461



0.7Earnings before income tax benefit


30,069



28.5



143,301



27.4Income tax benefit


113



0.1



758



0.1Net income


30,182



28.6



144,059



27.5Accretion of Series A preferred shares to redemption value


(814
)


(0.8
)


(860
)


(0.2
)Accretion of Series B preferred shares to redemption value


(1,799
)


(1.7
)


(2,726
)


(0.5
)Accretion of Series C preferred shares to redemption value


(116
)


(0.1
)


(1,351
)


(0.2
)Deemed dividend to Series A preferred shareholders


(1,568
)


(1.5
)


Net income available to ordinary shareholders

$
25,885



24.5
%

$
139,122



26.6
%   Net sales.
 79




---



##### Table of Contents



Year Ended December 31,2006


2007Product

Net Sales


% of Total


Net Sales


% of Total(In millions)





(In millions)156 x 156 mm wafers

$
36.3



34.4
%

$
408.1



77.9
%125 x 125 mm wafers


66.2



62.8



92.3



17.6150 x 150 mm wafers










1.3



0.2Processing of wafers for others


0.5



0.4



18.7



3.6Silicon materials


2.5



2.4



3.5



0.7Net sales

$
105.5



100.0
%

$
523.9



100.0
%     Cost of goods sold.
  Year Ended December 31,2006


2007Product

Cost of Goods Sold


% of Total


Cost of Goods Sold


% of Total(In millions)





(In millions)156 x 156 mm wafers

$
21.4



33.4
%

$
268.3



75.9
%125 x 125 mm wafers


40.3



62.9



68.5



19.4150 x 150 mm wafers










1.1



0.3Processing of wafers for others


0.3



0.5



13.1



3.7Silicon materials


2.0



3.2



2.7



0.7Cost of goods sold

$
64.0



100.0
%

$
353.7



100.0
%   Gross profit.
 80




---



##### Table of Contents



Operating expenses.
  Interest income and expense.
  Foreign currency exchange loss, net.
  Government subsidy.
  Net income.
  Accretion of Series A, Series B, Series C
    preferred shares to redemption values.
 81




---



##### Table of Contents



Deemed dividend to Series A preferred
    shareholders.
  Net income available to ordinary
    shareholders.
  Earnings per ordinary share.
  B.
    Liquidity
    and Capital Resources  Prepayments
    to Suppliers
      Advance
    Payments from Customers
   82




---



##### Table of Contents



Cash Flow
    and Working Capital
      Year Ended December 31,2006


2007


2008(In thousands)Net cash (used in)/provided by operating activities

$
(57,067
)

$
(80,663
)

$
333,061Net cash used in investing activities


(79,564
)


(328,623
)


(1,247,174
)Net cash provided by financing activities


154,891



462,324



1,087,698Effect of exchange rate changes on cash


2,280



205



(1,532
)Net increase in cash and cash equivalents


20,540



53,243



172,053Cash and cash equivalents at the beginning of period


9,687



30,227



83,470Cash and cash equivalents at the end of period

$
30,227


$
83,470


$
255,523   Operating
    activities
       83




---



##### Table of Contents



Investing
    activities
        Financing
    activities
  Series A-2,
   84




---



##### Table of Contents




    In March 2006, we borrowed $10.2 million in aggregate
    principal amount from China Construction Bank, approximately
    half of which was paid in March 2008 and the remainder was
    payable in March 2009. This facility carried a variable interest
    with reference to the prevailing base lending rate set by the
    Peoples Bank of China. The effective interest rate of this
    facility was 8.316% as of December 31, 2008. This facility
    was secured by our plant and machinery and was guaranteed by a
    company controlled by our chairman and chief executive officer,
    Mr. Peng. The outstanding balance of this facility was
    subsequently paid upon its maturity date in March 2009.
    In December 2006, we borrowed $25 million in aggregate
    principal amount from China Development Bank, which is repayable
    in five equal annual installments of $5.0 million from 2007
    through 2011. This facility carries a variable interest with
    reference to the prevailing six-month U.S. dollar LIBOR
    rate. The effective interest rate of this facility was 3.4% as
    of December 31, 2008. Interest is payable monthly. This
    facility is 85




---



##### Table of Contents



secured by our plant and machinery and land use rights and is
    guaranteed by our chairman and chief executive officer,
    Mr. Peng and his wife, Ms. Shan Zhou.  
    In February 2007, we borrowed $8.8 million in aggregate
    principal amount from Bank of China, which is payable in two
    equal annual installments of $4.4 million in 2008 and 2009.
    This facility carries a variable interest with reference to the
    prevailing two-year US dollar loan rate set by Bank of China.
    The effective interest rate of this facility was 8.9% as of
    December 31, 2008. Interest is payable quarterly. This
    facility is secured by our plant, machinery and certain of our
    raw materials and is guaranteed by our chairman and chief
    executive officer, Mr. Peng, and companies controlled by
    Mr. Peng.
    In April 2008, we borrowed $60 million in aggregate
    principal amount from China Development Bank, which is repayable
    in five installments: $5 million in 2009, $10 million
    in 2010, $10 million in 2011, $15 million in 2012 and
    $20 million in 2013. This facility carries a variable
    interest with reference to the prevailing six-month
    U.S. dollar LIBOR rate. The effective interest rate of this
    facility was 4.9% as of December 31, 2008. Interest is
    payable semi-annually. This facility is secured by our plant and
    machinery and guaranteed by our chairman and chief executive
    officer, Mr. Peng and his wife, Ms. Shan Zhou.
    In March and April 2008, we borrowed $23.4 million and
    $5.9 million in aggregate principal amount, respectively,
    from Agricultural Bank of China. These facilities are repayable
    in 2011. These facilities carry a variable interest with
    reference to the prevailing base lending rate set by the
    Peoples Bank of China. The effective interest rate of
    these facilities were 7.56% as of December 31, 2008.
    Interest is payable quarterly. These facilities are secured by
    certain of our raw materials.
    In July 2008, we borrowed $36.6 million in aggregate
    principal amount from China Construction Bank, which is
    repayable in four installments: $5.9 million in 2009,
    $10.2 million in 2010, $14.6 million in 2011, and
    $5.9 million in 2012. This facility is unsecured and
    carries a variable interest rate with reference to the
    prevailing base lending rate set by the Peoples Bank of
    China. The effective interest rate of the loan was 7.740% as of
    December 31, 2008. Interest is payable monthly.
    In August 2008, we borrowed $29.3 million in aggregate
    principal amount from Bank of China, which is repayable in
    February 2010. The loan is unsecured and carries a fixed
    interest rate at 7.560%. Interest is payable quarterly.      Capital
    Expenditures
   86




---



##### Table of Contents



ramping-up
  and/or and/or
  Restricted
    Net Assets
   87




---



##### Table of Contents



C.  Research
    and Development, Patents and Licenses, etc.  Research
    and Development
    
    optimizing our solidification process to achieve the highest
    conversion efficiency;
    improving our solidification purification process to allow us to
    use low-cost polysilicon materials without losing wafer
    efficiency and quality;
    reducing polysilicon kerf losses and improving polysilicon
    recoveries;
    improving our crucibles and coating technology to achieve
    re-usability of our crucibles;
    optimizing our ingot and wafer sizes, including making larger
    ingots and larger and thinner wafers;
    localizing the production of additional consumables in
    China; and
    localizing the production of some of our auxiliary equipment in
    China.      Intellectual
    Property Rights
     D.  Trend
    Information   88




---



##### Table of Contents



Key
    Growth Drivers
    Growing Electricity Demand and Supply
    Constraints.
  Government Incentives for Renewable Energy
    Sources.
  Tightening of Environmental Regulations.
  Increasing Cost Competitiveness of Solar
    Energy.
  Challenges
    Facing the Solar Power Industry
    Possible Reduction or Elimination of Government Subsidies and
    Incentives.
  Need to Improve Cost Competitiveness Against Other Energy
    Sources.
 89




---



##### Table of Contents



Supply Constraint of Polysilicon.
  Need to Broaden Awareness and Acceptance of Solar Power
    Usage.
  Photovoltaic
    Products Manufacturing Value Chain
      
  Polysilicon
    industry
      Solar
    wafer industry
     90




---



##### Table of Contents



E.  Off-balance
    Sheet Arrangements   91




---



##### Table of Contents



F.  Tabular
    Disclosure of Contractual Obligations    Total

Less Than 1 Year

1-3 Years

3-5 Years

More Than 5 Years(In thousands)Long-term debt obligations (including interest payments)

$
194,164


$
27,000


$
124,146


$
43,018


$
Short-term debt obligations (including interest payments)


663,697



663,697











Capital (finance) lease obligations


63,942



21,314



42,628







Non-cancelable purchase obligations
     raw materials


165,155



48,643



71,822



20,368



24,322 equipment


1,072,108



686,965



385,143







Convertible Senior Notes (including increase payments


485,500



19,000



38,000



428,500



Total

$
2,644,566


$
1,466,619


$
661,739


$
491,886


$
24,322        92




---



##### Table of Contents



ITEM 6.
    DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES A.  Directors
    and Senior Management    Directors and Executive Officers

Age

PositionXiaofeng Peng


33


Chairman and Chief Executive OfficerXingxue Tong


44


Director, President and Chief Operating OfficerLiangbao Zhu


42


Director and Senior Vice PresidentYonggang Shao


44


Director and Senior Vice PresidentGang Wang


40


Non-executive DirectorLouis T. Hsieh


44


Independent DirectorBing Xiang


46


Independent DirectorJunwu Liang


75


Independent DirectorJack Lai


55


Executive Vice President, Chief Financial Officer and SecretaryNicola Sarno


56


Senior Vice President of ManufacturingYuepeng Wan


43


Chief Technology OfficerRongqiang Cui


67


Head of Shanghai Jiaotong University LDK LaboratoryPietro Rossettog


58


Chief Wafer EngineerQiqiang Yao


36


Vice President of Finance   Directors
  Xiaofeng Peng
  Xingxue Tong
  Liangbao Zhu
  Yonggang Shao
 93




---



##### Table of Contents



Gang Wang
  Louis T. Hsieh
  Bing Xiang
  Junwu Liang
  Executive
    Officers
  Jack Lai
 94




---



##### Table of Contents



Nicola Sarno
  Yuepeng Wan
  Rongqiang Cui
  Pietro Rossetto
  Qiqiang Yao
 B.  Compensation
    of Directors and Officers  Compensation
    of Directors and Executive Officers
       95




---



##### Table of Contents



Indemnification
      Employment
    Agreements
   C.  Board
    Practices  and/or
  
    the audit committee,
    the compensation committee, and
    the corporate governance and nominating committee.     96




---



##### Table of Contents



Audit
    committee
    
    selecting the independent auditors and pre-approving all
    auditing and non-auditing services permitted to be performed by
    the independent auditors;
    reviewing and approving all proposed related-party transactions;
    discussing the annual audited financial statements and interim
    financial statements with management and the independent
    auditors;
    annually reviewing and reassessing the adequacy of our audit
    committee charter;
    meeting separately and periodically with management and the
    independent auditors;
    such other matters that are specifically delegated to our audit
    committee by our board of directors from time to time; and
    reporting regularly to the full board of directors.  Compensation
    committee
    
    reviewing and determining the compensation package for our
    senior executives;
    reviewing and making recommendations to the board with respect
    to the compensation of our directors;
    reviewing and approving officer and director indemnification and
    insurance matters;
    reviewing periodically and approving any long-term incentive
    compensation or equity plans, programs or similar arrangements,
    annual bonuses, employee pension and welfare benefit
    plans; and
    reporting regularly to the full board of directors.  Corporate
    governance and nominating committee
   97




---



##### Table of Contents




    identifying and recommending to the board nominees for election
    or re-election to the board;
    appointment to fill any vacancy;
    reviewing annually with the board the current composition of the
    board in light of the characteristics of independence, age,
    skills, experience and availability of service to us;
    identifying and recommending to the board the directors to serve
    as members of the boards committees;
    advising the board periodically with respect to significant
    developments in the law and practice of corporate governance as
    well as our compliance with applicable laws and regulations, and
    making recommendations to the board on all matters of corporate
    governance and on any corrective action to be taken;
    monitoring compliance with our code of business conduct and
    ethics, including reviewing the adequacy and effectiveness of
    our procedures to ensure proper compliance; and
    reporting regularly to the full board of directors.  Duties of
    Directors
   D.  Employees      Number of


Percentage ofEmployees


TotalManufacturing


11,233



79.5
%Quality control


842



6.0Research, development and engineering


694



4.9Administration


789



5.6Production planning


428



3.0Finance


78



0.5Procurement


66



0.5Total


14,130



100
%      98




---



##### Table of Contents



E.
    Share
    Ownership  2006
    Stock Incentive Plan
    
    motivate the eligible participants to optimize their performance
    efficiency for the benefit of our company;
    attract and retain the best available personnel in our industry
    through additional incentive to our employees and
    directors; and
    attract and otherwise maintain our on-going business
    relationship with consultants and business entities whose
    contributions are or will be beneficial to our long-term growth.  Eligible
    participants
    
    any full-time or part-time employees, executives or officers of
    our company or any of our subsidiaries;
    any directors, including non-executive directors and independent
    non-executive directors, of our company or any of our
    subsidiaries;
    any advisers, consultants and agents to us or any of our
    subsidiaries; and
    such other persons who, in the sole opinion of our board of
    directors, will contribute or have contributed to our
    development and operations.  Maximum
    number of shares
    Price
    of shares
   99




---



##### Table of Contents



Performance
    criteria
   100




---



##### Table of Contents



Outstanding
    options granted under our 2006 stock incentive
    plan
    Ordinary SharesUnderlyingOutstanding


Exercise PriceName

Options


($/Share)


Date of Grant

Date of ExpirationXiaofeng
    Peng(1),


500,000


$
4.45


August 1, 2006

July 31, 201115,000
(9)


13.06


January 15, 2009

January 14, 2019Xingxue
    Tong(2)


866,667



9.00


February 6, 2007

February 5, 2012*
(9)


13.06


January 15, 2009

January 14, 2019Liangbao
    Zhu(3)


333,334



4.45


August 1, 2006

July 31, 2011*
(9)


13.06


January 15, 2009

January 14, 2019Yonggang
    Shao(4)


333,334



4.45


August 1, 2006

July 31, 2011*
(9)


13.06


January 15, 2009

January 14, 2019Gang
    Wang(5)


*



9.00


April 17, 2007

April 16, 2012Louis T. Hsieh


*



9.00


May 31, 2007

May 30, 2012*



9.00


October 17, 2007

October 17, 2012Jack
    Lai(6)


*



4.45


August 1, 2006

July 31, 2011*
(9)


13.06


January 15, 2009

January 14, 2019Nicola Sarno


*



4.45


August 1, 2006

July 31, 2011*



33.96


July 6, 2007

July 5, 2012*
(9)


13.06


January 15, 2009

January 14, 2019Yuepeng Wan


*



9.00


February 6, 2007

February 5, 2012*
(9)


13.06


January 15, 2009

January 14, 2019Rongqiang Cui


*



4.45


August 1, 2006

July 31, 2011Pietro Rossetto


*



4.45


August 1, 2006

July 31, 2011*
(9)


13.06


January 15, 2009

January 14, 2019Qiqiang
    Yao(7)


*



4.45


August 1, 2006

July 31, 2011*
(9)


13.06


January 15, 2009

January 14, 2019Bing Xiang


*



8.46


April 16, 2009

April 15, 2019Junwu Liang


*



8.46


April 16, 2009

April 15, 2019Other employees as a
    group(8)


805,782



4.45


August 1, 2006

July 31, 2011Other employees as a
    group(8)


506,175



9.00


April 17, 2007

April 16, 2012Other employees as a
    group(8)


210,480



25.00


May 14, 2007

May 13, 2012Other employees as a
    group(8)


355,171



33.96


July 6, 2007

July 5, 2012Other employees as a
    group(8)


382,732



29.55


December 3, 2007

December 2, 2012Other employees as a
    group(8)


10,000



33.57


April 22, 2008

April 21, 2013Other employees as a
    group(8)(9)


255,400



13.12


November 13, 2008

November 12, 2018Other employees as a
    group(8)(9)


288,100



13.06


January 15, 2009

January 14, 2019Other employees as a
    group(8)


113,000



8.46


April 16, 2009

April 15, 2014Other employees as a
    group(8)(9)


64,300



8.46


April 16, 2009

April 15, 2019Total


6,606,143     *
    
    These directors and executive
    officers as a group, each beneficially owning less than 1% of
    our outstanding shares, together hold stock options exercisable
    for 1,556,668 shares.(1)
    
    Mr. Peng holds his stock
    options through his wholly owned British Virgin Islands company,
    LDK New Energy.(2)
    
    Mr. Tong holds his stock
    options through his wholly owned British Virgin Islands company,
    Superb Bright Limited. 101




---



##### Table of Contents



(3)
    
    Mr. Zhu holds his stock
    options through his wholly owned British Virgin Islands company,
    Feliz International Inc.(4)
    
    Mr. Shao holds his stock
    options through his wholly owned British Virgin Islands company,
    SM Future Investment Inc.(5)
    
    Mr. Wang holds his stock
    options through his wholly owned British Virgin Islands company,
    Sun Forever Limited.(6)
    
    Relates to options granted to
    Mr. Lai in his capacity as consultant prior to his
    employment at our company and in anticipation of his employment
    at our company.(7)
    
    Mr. Yao holds his stock
    options through his wholly owned British Virgin Islands company,
    Qiqiang Investment Consulting Inc.(8)
    
    Each employee holds less than 1% of
    our total outstanding voting securities.(9)
    
    Subject to a five-year vesting
    period.    Share
    Ownership by Directors and Executive Officers
    Shares BeneficiallyOwnedNumber

Percent(1)Directors and Executive OfficersXiaofeng Peng


75,585,796



66.8
%Xingxue Tong


*



*Liangbao Zhu


*



*Yonggang Shao


*



*Gang Wang


*



*Louis T. Hsieh


*



*Jack Lai


*



*Nicola Sarno


*



*Yuepeng Wan


*



*Rongqiang Cui


*



*Pietro Rossetto


*



*Qiqiang Yao


*



*Bing Xiang


*



*Junwu Liang


*



*     (1)
    
    The percentage of beneficial
    ownership is calculated by dividing the number of shares
    beneficially owned by such person or group by
    113,110,516 shares, being the number of shares outstanding
    as of March 31, 2009.*
    
    The person beneficially owns less
    than 1% of our outstanding shares.   102




---



##### Table of Contents



ITEM 7.
    MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A.  Major
    Shareholders    Shares Beneficially OwnedName

Number


PercentXiaofeng Peng


75,585,796



66.8
%        B.  Related
    Party Transactions    Purchase
    Contractual Arrangements
    
    Jiangxi LDK Solar purchased low value consumables totaling
    approximately $1.1 million from Jiangxi Liouxin Industry
    Co., Ltd., a company controlled by Mr. Peng; and 103




---



##### Table of Contents




    Jiangxi LDK Solar purchased crucibles totaling approximately
    $3.0 million from Jiangxi Sinoma, which is our affiliate.    Borrowings
    Guarantees
  page F-1
  Stock
    Option Grants
    Individual
    Income Tax Withholding Obligation
   C.  Interests
    of Experts and Counsel    ITEM 8.
    FINANCIAL
    INFORMATION A.  Consolidated
    Statements and Other Financial Information  page F-1
  Legal
    Proceedings
  In re LDK Solar
    Sec. Litig., Case No. C
    07-05182
    WHA.
 104




---



##### Table of Contents



Sean
    Coonerty v. Xiaofeng Peng, et al.
      Dividend
    Distribution Policy
       105




---



##### Table of Contents



B.  Significant
    Changes    ITEM 9.
    THE
    OFFER AND LISTING        High

LowAnnual Highs and Lows2007 (from June 1)

$
73.95


$
23.202008


51.26



9.95Quarterly Highs and Lows (From June 1, 2007)Second Quarter 2007


32.20



23.20Third Quarter 2007


73.95



33.53Fourth Quarter 2007


70.00



26.91First Quarter 2008


49.37



20.43Second Quarter 2008


47.16



27.50Third Quarter 2008


51.26



30.02Fourth Quarter 2008


33.12



9.95First Quarter 2009


16.01



4.04Second Quarter 2009 (through May 21, 2009)


10.85



6.78Monthly Highs and LowsNovember 2008


23.49



9.95December 2008


14.95



11.69January 2009


16.01



11.24February 2009


11.39



5.12March 2009


7.76



4.04April 2009


8.46



6.78May 2009 (through May 21, 2009)


10.85



8.02     ITEM 10.
    ADDITIONAL
    INFORMATION A.  Share
    Capital   B.  Memorandum
    and Articles of Association  Form 20-F
 106




---



##### Table of Contents



(File No. 001-33464),
  Mergers
    and similar arrangements
  Schemes of arrangement
    
    a majority in number of each class of shareholders and
    creditors, respectively, with whom the arrangement is to be
    made, and
    in addition, at least three-fourths in value of each such class
    of shareholders and creditors, respectively, that are present
    and voting either in person or by proxy at a meeting, or
    meetings, convened for that purpose. The convening of the
    meetings and the subsequent arrangement must be sanctioned by
    the Grand Court of the Cayman Islands. While a dissenting
    shareholder has the right to express to the court its view that
    the transaction ought not to be approved, the court can be
    expected to approve the arrangement if it determines that:
    the company is not proposing to act illegally or beyond the
    scope of its authority;
    the statutory provisions as to majority vote have been complied
    with;
    the shareholders have been fairly represented at the meeting in
    question;
    the arrangement is such that a businessman would reasonably
    approve; and
    the arrangement is not one that would more properly be
    sanctioned under some other provision of the Cayman Islands
    Companies Law or that would amount to a fraud on the
    minority under the Cayman Islands law.      Mergers and consolidations
      
    the directors of each constituent company must approve a written
    plan of merger or consolidation;
    the plan must be authorized by each constituent company by
    (a) a shareholder resolution by majority in number
    representing 75% in value of the shareholders voting together as
    one class; and (b) if the shares to be issued to each
    shareholder in the consolidated or surviving company are to have
    the same rights and economic value as the shares held in the
    constituent company, a special resolution of the shareholders
    voting together as one class. A proposed merger between a Cayman
    parent company and its Cayman subsidiary or subsidiaries will
    not require authorization by shareholder resolution; 107




---



##### Table of Contents




    the consent of each holder of a fixed or floating security
    interest of a constituent company in a proposed merger or
    consolidation is required unless the court (upon the application
    of the constituent company that has issued the security) waives
    the requirement for consent;
    the plan must be signed by a director on behalf of each
    constituent company and filed with the Registrar of Companies
    together with the required supporting documents;
    a certificate of merger or consolidation is issued by the
    Registrar of Companies which is the prima facieevidence
    of compliance with all statutory requirements in respect of the
    merger or consolidation. All rights and properties of each of
    the constituent companies will then vest in the surviving or
    consolidated company which will also be liable for all debts,
    contracts, obligations and liabilities of each constituent
    company. Similarly, any existing claims, proceedings or rulings
    of each constituent company will automatically be continued
    against the surviving or consolidated company; and
    provision is made for a dissenting shareholder of a Cayman
    constituent company to be entitled to payment of the fair value
    of his shares upon dissenting to the merger or consolidation.
    Where the parties cannot agree on the price to be paid to the
    dissenting shareholder, either party may file a petition to the
    court to determine fair value of the shares. These rights are
    not available where an open market exists on a recognized stock
    exchange for the shares of the class held by the dissenting
    shareholder.     C.  Material
    Contracts  Form F-1 No. 333-142881)
 D.  Exchange
    Controls    
    Foreign Currency Administration Rules of 1996, as
    amended; and
    Administrative Rules of the Settlement, Sale and Payment of
    Foreign Exchange of 1996.    and/or
 108




---



##### Table of Contents



E.  Taxation  Cayman
    Islands Taxation
    Peoples
    Republic of China Taxation
         109




---



##### Table of Contents



Certain
    U.S. Federal Income Tax Considerations
        
    certain financial institutions;
    insurance companies;
    broker dealers;
    U.S. expatriates;
    traders that elect to
    mark-to-market;
    tax-exempt entities;
    persons liable for alternative minimum tax;
    persons holding a note, ADS or share as part of a straddle,
    hedging, conversion or integrated transaction;
    persons whose functional currency is not the U.S. dollar;
    persons that actually or constructively own 10% or more of our
    voting stock; or
    persons holding ADSs or shares through partnerships or other
    entities treated as partnerships for U.S. federal income
    tax purposes.    
    a citizen or resident of the United States;
    a corporation (or other entity taxable as a corporation for
    U.S. federal income tax purposes) organized under the laws
    of the United States, any state in the United States or the
    District of Columbia;
    an estate whose income is subject to U.S. federal income
    taxation regardless of its source; or
    a trust that (1) is subject to the primary supervision of a
    court within the United States and one or more U.S. persons
    have the authority to control all substantial decisions of the
    trust or (2) was in existence on August 20, 1996, was
    treated as a U.S. person under the Internal Revenue Code on
    the previous day and has a valid election in effect under
    applicable U.S. Treasury regulations to be treated as a
    U.S. person.    non-U.S. tax
  ADSs
   110




---



##### Table of Contents



Taxation
    of Dividends and Other Distributions on the ADSs or Ordinary
    Shares
        U.S.-PRC U.S.-PRC
  Taxation
    of Dispositions of ADSs or Ordinary Shares
  U.S.-PRC
 111




---



##### Table of Contents



Passive
    Foreign Investment Company
  non-U.S. corporation
  
    at least 75% of its gross income is passive; or
    at least 50% of the value of its assets (based on an average of
    the quarterly values of the assets during the taxable year) is
    attributable to assets that produce or are held for the
    production of passive income.        
    the excess distribution or gain will be allocated ratably over
    your holding period for the ADSs or shares;
    the amount of excess distribution allocated to the current
    taxable year and to any taxable year prior to the first taxable
    year in which we became a PFIC, will be treated as ordinary
    income subject to tax for the current taxable year; and
    the amount of excess distribution allocated to each other year
    will generate an additional tax that is due for the current
    taxable year and that is equal to the total, for each such other
    year, of (i) the amount of excess distribution allocated to
    such year multiplied by the highest tax rate in effect for such
    year and (ii) an amount equal to the interest charge that
    would have been imposed for underpaying that amount of tax for
    such year.     112




---



##### Table of Contents



Information
    Reporting and Backup Withholding
  Form W-9.
   F.  Dividends
    and Paying Agents   113




---



##### Table of Contents



G.  Statement
    by Experts   H.  Documents
    on Display  Form 20-F, 1-800-SEC-0330
   I.  Subsidiary
    Information    ITEM 11.
    QUALITATIVE
    AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK  Inflation
    Foreign
    Currency Risk
  page F-1
   114




---



##### Table of Contents



As of December 31, 2006

As of December 31, 2007

As of December 31, 2008()

(US$)

()

(US$)

()

(US$)

(CHF)Assets


7,145,900



54,910,399



33,249,672



137,831,172



14,902,945



118,538,468



Liabilities


(468,547
)


(58,676,243
)


(16,227,974
)


(254,009,481
)


(8,876,233
)


(453,074,644
)


(880,017
)Net exposure


6,677,352



(3,765,844
)


17,021,698



(116,178,309
)


6,026,712



(334,536,176
)


(880,017
)           Interest
    Rate Risk
   115




---



##### Table of Contents



Credit
    Risk
    Liquidity
    Risk
    ITEM 12.
    DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES   PART II  ITEM 13.
    DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES    ITEM 14.
    MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
    PROCEEDS    Form F-3 333-152009)
  Form F-3 333-153585)
 116




---



##### Table of Contents



A.
    Material
    Modification to the Instruments Defining the Rights of Security
    Holders    B.
    Material
    Modification to the Rights of Registered Securities by Issuing
    or Modifying or any Other Class of Securities    C.
    Withdrawal
    or Substitution of a Material Amount of the Assets Securing any
    Registered Securities    D.
    Change
    of Trustees or Paying Agents for any Registered Securities    E.
    Use
    of Proceeds    ITEM 15.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
    Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rule 13a-15(f)
     117




---



##### Table of Contents



Attestation
    Report of Independent Registered Public Accounting
    Firm
     Internal Control 
    Integrated Framework
        Internal Control  Integrated Framework
    KPMG
   118




---



##### Table of Contents



Changes
    in Internal Control over Financial Reporting
    ITEM 16.
    RESERVED  ITEM 16A.
    AUDIT
    COMMITTEE FINANCIAL EXPERT    ITEM 16B.
    CODE
    OF ETHICS  Form F-1 333-142881).
  ITEM 16C.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    2007

2008Audit
    fees(1)

$
673,905


$
1,178,284Audit-related
    fees(2)

$
1,555,507



1,181,114Tax
    fees(3)





$
23,226     (1)
    
    Audit fees means the
    aggregate fees billed for professional services rendered by our
    independent auditor for the annual audit of our consolidated
    financial statements.(2)
    
    Audit-related fees
    means the aggregate fees billed for assurance and related
    services by our independent auditor that are reasonably related
    to the performance of the audit or review of our consolidated
    financial statements and are not reported under Audit
    fees. Services comprising the fees disclosed under the
    category of Audit-related fees in 2007 involve
    principally the issue of comfort letter and reading of offering
    documents in connection with our IPO. Services comprising the
    fees disclosed under the category of Audit-related
    fees in 2008 involve principally the issue of comfort
    letter and reading of offering documents in connection with our
    issuance of convertible senior notes in April 2008 and the
    follow-on equity offering in September 2008.(3)
    
    Tax fees include fees
    billed for tax compliance services.  case-by-case
   119




---



##### Table of Contents



ITEM 16D.
    EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES    ITEM 16E.
    PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS    ITEM 16F.
    CHANGE
    IN REGISTRANTS CERTIFYING ACCOUNTANT    ITEM 16G.
    CORPORATE
    GOVERNANCE  Summary
    of Significant Differences in Corporate Governance
    Practices
    Board
    and committee independence
        Audit
    committee
     120




---



##### Table of Contents



Remuneration
    committee
    Form 10-K. Form 20-F.
  Nomination
    committee
   PART III  ITEM 17.
    FINANCIAL
    STATEMENTS    ITEM 18.
    FINANCIAL
    STATEMENTS  page F-1
  ITEM 19.
    EXHIBITS    ExhibitNumber

Document1
.1

Fourth Amended and Restated Memorandum and Articles of
    Association of the registrant, dated as of June 17, 2008.2
.1

Form of Deposit Agreement, incorporated by reference to
    Registration Statement on
    Form F-6
    filed with the SEC (Registration
    No. 333-142899).2
.2

Amended and Restated Shareholders Agreement, dated
    December 19, 2006, incorporated by reference to
    Exhibit 4.4 to our Registration Statement on
    Form F-1
    filed with the SEC (File Number:
    333-142881).2
.3

Indenture dated April 15, 2008 between the registrant and
    the Bank of New York Mellon, incorporated by reference to
    Exhibit 4.5 to our Registration Statement on
    Form F-3
    filed with the SEC (File Number:
    333-152009).2
.4

Restricted Issuance Agreement, dated as of April 15, 2008,
    as supplement to the Deposit Agreement under Exhibit 2.1,
    incorporated by reference to Exhibit 4.4 to our
    Registration Statement on
    Form F-3
    filed with the SEC (File Number:
    333-152009).4
.1

Form Employment Agreement between the registrant and each
    senior officer, incorporated by reference to Exhibit 10.2
    to our Registration Statement on
    Form F-1
    filed with the SEC (File Number:
    333-142881).4
.2

Form Service Agreement between the registrant and each
    executive director, incorporated by reference to
    Exhibit 10.3 to our Registration Statement on
    Form F-1
    filed with the SEC (File Number:
    333-142881).4
.3

Form Service Agreement between the registrant and each
    independent director, incorporated by reference to
    Exhibit 10.4 to our Registration Statement on
    Form F-1
    filed with the SEC (File Number:
    333-142881).4
.4

Form Confidentiality and Non-compete Agreement between the
    registrant and each senior officer, engineer and technician,
    incorporated by reference to Exhibit 10.5 to our
    Registration Statement on
    Form F-1
    filed with the SEC (File Number:
    333-142881). 121




---



##### Table of Contents



ExhibitNumber

Document4
.5

Supply Agreement, dated July 18, 2007, between GT Solar, as
    seller, and LDK Solar Co., Ltd. and Jiangxi LDK Solar, as buyers
    (certain information in the agreement has been omitted pursuant
    to a request for confidential treatment), incorporated by
    reference to Exhibit 4.36 to our annual report for the year
    2007 on
    Form 20-F
    filed with the SEC on April 7, 2008.4
.6

Summary translation of Loan Guarantee Agreement, dated
    February 5, 2007, between Mr. Xiaofeng Peng and Bank
    of China Xinyu Branch, incorporated by reference to
    Exhibit 4.37 to our annual report for the year 2007 on
    Form 20-F
    filed with the SEC on April 7, 2008.4
.7

Summary translation of Cooperation Agreement, dated
    January 23, 2007, between Jiangxi LDK Solar and Nanchang
    University, incorporated by reference to Exhibit 4.40 to
    our annual report for the year 2007 on
    Form 20-F
    filed with the SEC on April 7, 2008.4
.8

Summary translation of Loan Guarantee Agreement, dated
    April 23, 2008, among Mr. Xiaofeng Peng, Ms. Shan
    Zhou and China Development Bank.4
.9

Summary translation of Loan Guarantee Agreement, dated
    February 23, 2009, between Mr. Xiaofeng Peng and
    Agricultural Bank of China Xinyu Branch.4
.10

Summary translation of Supply Agreement, dated July 22,
    2008, between JYT Corporation, as seller, and Jiangxi LDK Solar,
    as buyer.4
.11

Registration Rights Agreement, dated as of April 15, 2008,
    incorporated by reference to Exhibit 4.7 to our
    Registration Statement on
    Form F-3
    filed with the SEC (File Number:
    333-152009).8


List of subsidiaries.11


Code of Ethics of the registrant, incorporated by reference to
    Exhibit 99.1 to our Registration Statement on
    Form F-1
    filed with the filed with the SEC (File Number:
    333-142881).12
.1

Certification of the principal executive officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 200212
.2

Certification of the principal financial officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 200213
.1

Certification of the principal executive officer pursuant to
    Section 906 of Sarbanes-Oxley Act of 200213
.2

Certification of the principal financial officer pursuant to
    Section 906 of Sarbanes-Oxley Act of 200215
.1

Consent of Independent Registered Public Accounting Firm  122




---



##### Table of Contents



SIGNATURE
  Form 20-F
    By:
    /s/  Xiaofeng
    Peng   Title:
    Chairman & Chief Executive Officer  By:
    /s/  Jack
    Lai   Title:
    Chief Financial Officer   123




---



##### 



LDK SOLAR
    CO., LTD.
  INDEX
    TO CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets as of
    December 31, 2007 and 2008


F-3Consolidated Statements of Income for the years
    ended December 31, 2006, 2007 and 2008


F-4Consolidated Statements of Shareholders
    Equity and Comprehensive Income for the years ended
    December 31, 2006, 2007 and 2008


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2006, 2007 and 2008


F-7Notes to the Consolidated Financial Statements
    for the years ended December 31, 2006, 2007 and 2008


F-9   F-1




---



##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
           Internal Control-Integrated Framework
  KPMG
   F-2




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
 (Amounts in US$ thousands, except share and per share
    data)
  December 31,Note

2007

2008ASSETSCurrent assetsCash and cash equivalents




83,470



255,523Pledged bank deposits

(10)


135,950



83,383Trade accounts receivable

(2g)


3,767



94,733Bills receivable








3,075Inventories

(3)(10)


349,997



616,901Prepayments to suppliers, net

(4)


138,193



71,214Other current assets, including amount due from the Groups
    executives and employees of $21,742 and $42,021 as of
    December 31, 2007 and 2008 respectively

(5)


29,825



68,123Deferred income tax assets

(16)


546



44,690Total current assets




741,748



1,237,642Property, plant and equipment, net

(6)(10)(12)


336,763



1,697,203Deposits for purchase of property, plant and equipment




151,233



233,296Intangible asset, net

(7)


1,096



1,037Land use rights

(8)(10)(24)


29,259



99,162Inventories to be processed beyond one year

(3)


29,981



Prepayments to suppliers expected to be utilized beyond one year

(4)


18,994



33,617Pledged bank deposits  non-current

(10)






49,686Debt issuance costs, net








8,764Investment in an associate

(9)






5,630Other financial assets

(28)


525



Deposits relating to sales and leaseback transaction

(12)






7,316Deferred income tax assets, net

(16)


387



375Total assets




1,309,986



3,373,728LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesShort-term bank borrowings and current installments of long-term
    bank borrowings

(10)


264,101



666,200Bills payable








11,406Trade accounts payable




18,032



124,066Advance payments from customers, current installments




141,223



256,411Accrued expenses and other payables

(11)


95,301



429,968Due to a related party

(24)






4,359Other financial liabilities

(28)


3,357



18,545Total current liabilities




522,014



1,510,955Long-term bank borrowings, excluding current portion

(10)


25,125



154,252Obligations under capital leases, excluding current installments

(12)






40,083Advance payments from customers  noncurrent




67,554



487,577Other liabilities




2,222



3,485Deferred income tax liability

(16)






1,468Convertible senior notes

(13)






400,000Total liabilities




616,915



2,597,820SHAREHOLDERS EQUITYOrdinary shares: US$0.10 par value; 499,580,000 shares
    authorized as of December 31, 2007 and 2008; 106,044,700
    and 113,501,049 shares issued as of December 31, 2007
    and 2008, respectively; 106,044,700 and 113,110,396 shares
    outstandingas of December 31, 2007 and 2008, respectively

(19)


10,604



11,311Additional paid-in capital

(15)


486,253



446,327Statutory reserve




18,697



29,676Accumulated other comprehensive income




31,481



83,314Retained earnings




146,036



205,280Total shareholders equity




693,071



775,908Commitments and contingencies

(17)Total liabilities and shareholders equity




1,309,986



3,373,728    F-3




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF INCOME
 (Amounts in US$ thousands, except share and per share
    data)
  Year

Year

YearEnded

Ended

EndedDecember 31

December 31,

December 31,Note

2006

2007

2008Net sales156mm by 156mm wafers




36,263



408,125



1,347,191125mm by 125mm wafers




66,189



92,270



132,930150mm by 150mm wafers








1,338



14,913Processing of wafers on behalf of others




489



18,697



116,859Silicon materials




2,513



3,516



31,602Total net sales




105,454



523,946



1,643,495Cost of goods sold,156mm by 156mm wafers




(21,399
)


(268,311
)


(1,300,737
)125mm by 125mm wafers




(40,231
)


(68,509
)


(130,899
)150mm by 150mm wafers








(1,127
)


(14,951
)Processing of wafers on behalf of others




(313
)


(13,094
)


(83,383
)Silicon materials




(2,019
)


(2,668
)


(25,169
)Total cost of goods sold, including provisions for inventory
    write-downs of US$ nil, US$ 4,170, US$ 311,999 during
    the years ended December 31, 2006, 2007 and 2008
    respectively




(63,962
)


(353,709
)


(1,555,139
)Gross profit




41,492



170,237



88,356Selling expenses




(286
)


(873
)


(3,786
)General and administrative expenses, including provisions for
    doubtful recoveries of prepayments to suppliers of US$ nil in
    2006 and 2007, and US$20,582 in 2008




(3,771
)


(19,360
)


(68,010
)Research and development expenses




(290
)


(3,202
)


(7,570
)Total operating expenses




(4,347
)


(23,435
)


(79,366
)Income from operations




37,145



146,802



8,990Other income (expenses):Interest income




105



4,109



5,875Interest expense and amortization of discount on exchangeable
    notes and convertible senior notes issuance costs

(14)


(7,133
)


(9,419
)


(34,347
)Foreign currency exchange (loss) gain, net




(1,325
)


(1,654
)


14,495Government subsidy

(2u)


1,268



3,461



19,665Change in fair value of prepaid forward contracts

(15)










60,028Decrease in fair value of warrants




9



2



Equity in income of an associate

(9)










704Others, net












(48
)Earnings before income tax




30,069



143,301



75,362Income tax benefit (expense)

(16)


113



758



(5,139
)Net income




30,182



144,059



70,223Accretion of Series A redeemable convertible preferred
    shares to redemption value

(18)


(814
)


(860
)


Accretion of Series B redeemable convertible preferred
    shares to redemption value

(18)


(1,799
)


(2,726
)


Accretion of Series C redeemable convertible preferred
    shares to redemption value

(18)


(116
)


(1,351
)


Deemed dividend to Series A redeemable convertible
    preferred shareholders




(1,568
)






Net income available to ordinary shareholders




25,885



139,122



70,223Basic earnings per ordinary share

(22)


0.35



1.50



0.67Diluted earnings per ordinary share

(22)


0.35



1.37



0.64    F-4




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS
    EQUITY AND COMPREHENSIVE INCOMEFOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
    (Amounts in US$ thousands, except share and per share
    data)
  Accumulated

(AccumulatedAdditional

Subscription



Other

Deficit) /

Total

TotalOrdinary Shares

Contributed

Paid-In

Receivable for

Statutory

Comprehensive

Retained

Shareholders

ComprehensiveNumber

Amount

Capital

Capital

Ordinary Share

Reserve

Income

Earnings

Equity

IncomeJanuary 1, 2006










11,534















39



(274
)


11,299Net income






























30,182



30,182



30,182Appropriation to statutory reserve (Note 20)






















3,623







(3,623
)


Foreign currency translation adjustment, net of nil tax


























2,280







2,280



2,280Total comprehensive income






































32,462Capital contributions (Note 1)










17,466























17,466Effect of reorganization (Note 1):Distributions to shareholders in connection with the
    Reorganization (Note 1)










(8,000
)






















(8,000
)Issuance of ordinary shares (Note 1 & Note 19)


75,000,000



7,500











(7,490
)














10Transfer to additional paid-in capital










(21,000
)


21,000



















Share options (Note 21)














2,294



















2,294Deemed dividend to Series A redeemable convertible
    preferred shareholders














1,568















(1,568
)


Accretion of Series A redeemable convertible preferred
    shares to redemption value (Note 18)






























(814
)


(814
)Accretion of Series B redeemable convertible preferred
    shares to redemption value (Note 18)






























(1,799
)


(1,799
)Accretion of Series C redeemable convertible preferred
    shares to redemption value (Note 18)






























(116
)


(116
)Discount amortization on exchangeable notes














4,440



















4,440December 31, 2006


75,000,000



7,500







29,302



(7,490
)


3,623



2,319



21,988



57,242    F-5




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND
    COMPREHENSIVE INCOME  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
    (Amounts in US$ thousands, except share and per share
    data)
  Accumulated

(AccumulatedAdditional

Subscription



Other

Deficit) /

Total

TotalOrdinary Shares

Contributed

Paid-In

Receivable for

Statutory

Comprehensive

Retained

Shareholders

ComprehensiveNumber

Amount

Capital

Capital

Ordinary Share

Reserve

Income

Earnings

Equity

IncomeNet income






























144,059



144,059



144,059Appropriation to statutory reserve (Note 20)






















15,074







(15,074
)


Settlement of subscription receivable


















7,490















7,490Foreign currency translation adjustment, net of nil tax


























29,162







29,162



29,162Total comprehensive income






































173,221Issuance of new shares, net of related expenses US$26,866


14,007,700



1,400







349,941



















351,341Conversion of Series A, Series B and Series C
    redeemable convertible preferred shares


15,580,000



1,558







91,123



















92,681Issuance of ordinary shares upon exercise of share options


1,457,000



146







6,338



















6,484Share options (Note 21)














9,549



















9,549Accretion of Series A redeemable convertible preferred
    shares to redemption value (Note 18)






























(860
)


(860
)Accretion of Series B redeemable convertible preferred
    shares to redemption value (Note 18)






























(2,726
)


(2,726
)Accretion of Series C redeemable convertible preferred
    shares to redemption value (Note 18)






























(1,351
)


(1,351
)December 31, 2007


106,044,700



10,604







486,253







18,697



31,481



146,036



693,071Net income






























70,223



70,223



70,223Appropriation to statutory reserve (Note 20)






















10,979







(10,979
)


Foreign currency translation adjustment, net of nil tax


























51,833







51,833



51,833Total comprehensive income






































122,056Issuance of new shares, net of related expenses US$9,508


4,800,000



480







190,412



















190,892Issuance of ordinary shares upon exercise of share options


2,265,696



227







12,513



















12,740Share options (Note 21)














16,614



















16,614Prepaid forward repurchase of ordinary shares (Note 15)














(259,465
)


















(259,465
)December 31, 2008


113,110,396



11,311







446,327







29,676



83,314



205,280



775,908


F-6




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
    (Amounts in US$ thousands, except share and per share
    data)
  Year

Year

YearEnded

Ended

EndedDecember 31,

December 31,

December 31,2006

2007

2008Cash flows from operating activities:Net income


30,182



144,059



70,223Adjustments to reconcile net income to net cash (used in)
    provided by operating activities:Depreciation and amortization


2,766



15,085



36,005Provision for doubtful recovery of prepayments to suppliers










20,582Provisions for inventory write-downs






4,170



311,999Deferred income tax benefit


(113
)


(758
)


(41,163
)Equity in income of an associate










(704
)Share-based compensation


2,028



9,390



16,614Interest on exchangeable notes


13







Amortization of discount on the exchangeable notes


4,440







Amortization of convertible senior notes issuance costs










2,493Decrease in fair value of warrants


(9
)


(2
)


Change in fair value of prepaid forward contracts










(60,028
)Changes in operating assets and liabilities:Pledged bank deposits related to purchase of inventory and other
    operating activities


(4,956
)


(19,900
)


(59,633
)Trade accounts receivable and bills receivable


(2,306
)


(1,461
)


(93,782
)Inventories


(94,886
)


(289,262
)


(530,244
)Prepayments to suppliers


(36,752
)


(119,469
)


29,984Other assets


(1,603
)


(25,475
)


(44,769
)Trade accounts payable and bills payable


6,116



11,913



117,440Advance payments from customers


36,285



168,775



532,578Accrued expenses and other payables


1,728



18,915



26,526Amount due to a related party










2,164Other financial liabilities






3,357



(3,224
)Net cash (used in) provided by operating activities


(57,067
)


(80,663
)


333,061Cash flows from investing activities:Purchase of land use rights


(5,482
)


(23,452
)


(69,110
)Purchase of property, plant and equipment, including deposits
    and cash paid for interest capitalized


(72,840
)


(305,171
)


(1,125,640
)Purchase of intangible asset


(1,242
)






Pledged bank deposit related to purchase of property, plant and
    equipment










(103,166
)Release of pledged bank deposit related to purchase of property,
    plant and equipment










55,644Cash paid for investment in an associate










(4,902
)Net cash used in investing activities


(79,564
)


(328,623
)


(1,247,174
)    F-7




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH
    FLOWS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
    (Amounts in US$ thousands, except share and per share
    data)
  Year

Year

YearEnded

Ended

EndedDecember 31,

December 31,

December 31,2006

2007

2008Cash flows from financing activities:Capital contributions


2,022







Pledged bank deposits used for bank borrowings






(111,094
)


Pledged bank deposits released upon repayment of bank borrowings










119,386Proceeds from new loans and borrowings


114,116



288,302



1,035,803Repayment of loans and borrowings


(27,106
)


(80,199
)


(513,834
)Loans and advances from related parties


18,773







2,195Repayment of loans and advances from related parties


(29,838
)






Proceeds from issuance of ordinary shares


10



369,489



205,104Distributions to shareholders in connection with the
    Reorganization


(8,000
)






Payment of expenses relating to issuance of ordinary shares


(405
)


(4,174
)


(1,472
)Proceeds from issuance of exchangeable notes, net of issue cost
    US$52


7,948







Proceeds from
    Series A-2
    redeemable convertible preferred shares, net of issue cost US$51


6,949







Proceeds from Series B redeemable convertible preferred
    shares, net of issue cost US$78


47,922







Proceeds from Series C redeemable convertible preferred
    shares


22,500







Proceeds from issuance of convertible senior notes, net of
    issuance costs










388,743Payment for Companys ordinary shares under prepaid forward
    contracts










(199,437
)Proceeds from sale-leaseback transaction










63,155Deposit paid for capital leases










(7,316
)Principal payments on capital lease obligations










(4,629
)Net cash provided by financing activities


154,891



462,324



1,087,698Effect of foreign currency exchange rate changes on cash and
    cash equivalents


2,280



205



(1,532
)Net increase in cash and cash equivalents


20,540



53,243



172,053Cash and cash equivalents at beginning of year


9,687



30,227



83,470Cash and cash equivalents at end of year


30,227



83,470



255,523Supplemental disclosures of cash flow information:Interest payments, net of amount capitalized


2,680



9,926



27,680Income tax paid










42,169Supplemental disclosures of non-cash investing and financing
    transaction:Property, plant and equipment contributed as paid-in capital


15,444







Payable for purchase of property, plant and equipment


10,893



60,954



354,247Payable for purchase of land use rights


1,268



832



11,865Conversion of Series A, Series B and Series C
    redeemable convertible preferred shares into ordinary shares






92,681



Conversion from exchangeable notes to
    Series A-1
    redeemable convertible preferred shares


7,948







Offset of amounts due to/from related party


5,478







    F-8




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
    (Amounts in US$ thousands, except share and per share
    data)
  (1)
    PRINCIPAL
    ACTIVITIES, ORGANIZATION AND BASIS OF PRESENTATION  Principal
    activities
      Organization
      ten-for-one
      Series A-1 Series A-2
         F-9




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
          Basis
    of presentation
       F-10




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (2)
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  (a)  Principles
    of consolidation
    (b)  Use
    of estimates
    (c)  Foreign
    currency transactions and translations
      (d)  Commitments
    and contingencies
    (e)  Cash
    and cash equivalents
    (f)  Pledged
    bank deposits
   F-11




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (g)  Trade
    accounts receivable
    (h)  Inventories
    (i)  Property,
    plant and equipment, net
      Buildings


30 yearsPlant and machinery


10 yearsFurniture, fixture and office equipment


5 yearsMotor vehicles


6 years   (j)  Intangible
    asset, net
    (k)  Land
    use rights
    (l)  Investments
    in an associate
   F-12




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (m)  Impairment
    of long-lived assets
    (n)  Fair
    value measurement
  Fair Value
    Measurements
  FAS 157-2, Effective Date of FASB Statement
    No. 157, 157-2
  FAS 157-3, Determining the Fair Value of a Financial Asset When
    the Market for That Asset is Not Active, FAS 157-3 FAS 157-3
  (o)  Derivative
    financial instruments
  Accounting for Derivative
    Instruments and Certain Hedging Activities
  Disclosures about Derivative Instruments and Hedging
    Activities, an amendment of FASB Statement
    No. 133.
 F-13




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (p)  Revenue
    recognition
          (q)  Buy/sell
    arrangements
    (r)  Shipping
    and handling
    (s)  Research
    and development costs
   F-14




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (t)  Advertising
    expenses
    (u)  Government
    subsidy
            (v)  Income
    taxes
    Accounting for Uncertainty in
    Income Taxes  an Interpretation of FASB Statement
    No. 109
 F-15




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (w)  Share-based
    compensation
  Share-based Payment,
  No. 96-18, Accounting for Equity Instruments That are Issued to
    Other Than Employees for Acquiring, or in Conjunction with
    Selling, Goods or Services.
  (x)  Embedded
    beneficial conversion of convertible instruments
  No. 98-5 Conversion Features or Contingently Adjustable Conversion
    Ratios No. 00-27 Application of Issue
    No. 98-5
    to Certain Convertible Instruments,
  (y)  Employee
    benefit plans
   F-16




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (z)  Earnings
    per share
      (aa)  Segment
    reporting
  Disclosure about Segments of an Enterprise and Related
    Information
  (ab)  Start-up
    costs
  start-up
  (ac)  Recently
    issued accounting pronouncements not yet adopted
  FASB
    Staff Position
    140-3
  FAS 140-3, Accounting for Transfers of Financial Assets and
    Repurchase Financing Transactions.
 F-17




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  FAS 140-3
  SFAS No. 141R
    (revised 2007) and SFAS No. 160
  Business Combinations Noncontrolling Interests
    in Consolidated Financial Statements  an amendment to
    ARB No. 51 )
  FASB
    Staff Position No. APB
    14-1 (FSP
    APB
    14-1)
  14-1, Accounting for Convertible Debt Instruments that May be
    Settled in Cash Upon Conversion 14-1). 14-1 14-1 14-1 14-1,
  Emerging
    Issues Task Force Issue
    No. 07-5
    (EITF Issue
    No. 07-5)
  No. 07-5, Determining Whether an Instrument (or Embedded Feature)
    Is Indexed to an Entitys Own Stock. EITF 07-5 EITF 07-5
 F-18




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (3)
    INVENTORIES  December 31,

December 31,2007

2008Inventories consist of the following:Raw materials


312,678



343,439Work in progress


24,463



148,948Supplies


13,705



52,760Finished goods


29,132



71,754379,978



616,901Inventories, net: Current


349,997



616,901 Non-current


29,981



         (4)
    PREPAYMENTS
    TO SUPPLIERS, NET    (5)
    OTHER
    CURRENT ASSETS  December 31,

December 31,2007

2008Receivable from the Groups executives and employees


21,742



42,021VAT recoverable


5,738



20,266Others


2,345



5,83629,825



68,123    F-19




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (6)
    PROPERTY,
    PLANT AND EQUIPMENT, NET    December 31,

December 31,2007

2008Buildings


20,384



83,864Plant and machinery


221,014



623,585Furniture, fixtures and office equipment


4,519



9,614Motor vehicles


2,383



4,888248,300



721,951Less: Accumulated depreciation


(16,075
)


(53,072
)Construction in progress


104,538



1,028,324336,763



1,697,203       (7)
    INTANGIBLE
    ASSET, NET  December 31,

December 31,2007

2008Technical know-howCost


1,328



1,420Less: Accumulated amortization


(232
)


(383
)1,096



1,037       (8)
    LAND USE
    RIGHTS   F-20




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (9)
    INVESTMENT
    IN AN ASSOCIATE    (10)
    BANK
    BORROWINGS  (a)  Current
  December 31,

December 31,2007

2008Bank borrowings  secured


224,879



320,767Bank borrowings  unsecured


24,645



319,060Current installments of long-term bank borrowings (note (b))


14,577



26,373264,101



666,200        F-21




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (b)  Non-current
  December 31,

December 31,2007

2008Secured loan from China Construction Bank


10,952



6,145Secured loan from China Development Bank


20,000



75,000Secured loan from Bank of China


8,750



4,375Secured loan from Agricultural Bank of China






29,264Unsecured loan from China Construction Bank






36,579Unsecured loan from Bank of China






29,26239,702



180,625Less: current installments


(14,577
)


(26,373
)25,125



154,252     six-month
       F-22




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        2009


26,3732010


54,5042011


58,8952012


20,8532013


20,000180,625   (11)
    ACCRUED
    EXPENSES AND OTHER PAYABLES    December 31,

December 31,2007

2008Purchase of equipment


60,954



354,247Purchase of land use rights


832



11,865Withholding individual income tax payable


21,742



42,021Accrued payroll and welfare


3,305



6,200Income tax payables






4,299Other accruals and payable


8,468



11,33695,301



429,968      F-23




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (12)
    CAPITAL
    LEASE OBLIGATIONS      Plant and machinery


25,877Less: accumulated amortization


(50
)25,827Construction-in-progress 
    equipment pending installation


37,27863,105       Year ending December 31:2009


21,3142010


21,3142011


21,314Total minimum lease payments


63,942Less: Amounts representing interest (at interest rate of 5.40%)


(5,416
)Present value of minimum payments


58,526Current portion


(18,443
)Non-current portion


40,083   (13)
    CONVERTIBLE
    SENIOR NOTES     F-24




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
                  90-day
 F-25




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      (14)
    INTEREST
    COSTS    Year

Year

YearEnded

Ended

EndedDecember 31,

December 31,

December 31,2006

2007

2008Interest costs on bank borrowings, and convertible senior notes
    and amortization of convertible senior notes issuance costs
    capitalized


122



173



14,305Interest costs charged to income Interest on bank borrowings


2,680



9,926



23,736 Interest on convertible senior notes and amortization of
    convertible senior notes issuance costs










10,204 Change of fair value of interest rate swap contract






(507
)


407 Interest on exchangeable notes


13







 Discount amortization on exchangeable notes


4,440







Sub-total


7,133



9,419



34,347Total interest costs


7,255



9,592



48,652   (15)
    PREPAID
    FORWARD CONTRACTS       F-26




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      (16)
    INCOME
    TAXES    Cayman
    Islands
    Peoples
    Republic of China
        HK
    SAR
    United
    States
   F-27




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Current

Deferred

TotalYear ended December 31, 2008PRC


46,261



(40,250
)


6,011U.S. federal


29







29U.S. state and local


12







12Other jurisdiction






(913
)


(913
)46,302



(41,163
)


5,139Year ended December 31, 2007PRC






(758
)


(758
)U.S. federal










U.S. state and local










Other jurisdiction










(758
)


(758
)Year ended December 31, 2006PRC






(113
)


(113
)U.S. federal










U.S. state and local










Other jurisdiction














(113
)


(113
)     Year

Year

YearEnded

Ended

EndedDecember 31,

December 31,

December 31,2006

2007

2008PRC operations


34,510



149,227



25,394Non-PRC operations


(4,441
)


(5,926
)


49,968Total


30,069



143,301



75,362  F-28




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Year Ended

Year Ended

Year EndedDecember 31,

December 31,

December 31,2006

2007

2008Earnings before income taxes


30,069



100
%


143,301



100
%


75,362



100
%Computed income tax expense


9,922



33
%


47,289



33
%


18,841



25
%Effect of tax rate differential


1,465



5
%


824



1
%


(11,352
)


(15
)%Change in tax rate






0
%


214



1
%






0
%Non-deductible expensesShare-based compensation


669



2
%


3,099



2
%


4,154



6
%Pre-operating expenses


217



1
%






0
%






0
%Others


1



0
%






0
%


56



0
%Change in valuation allowance






0
%


1,132



1
%


(521
)


(1
)%Tax holiday


(12,387
)


(41
)%


(53,316
)


(37
)%


(5,897
)


(8
)%Others






0
%






0
%


(142
)


(0
)%Actual income tax (benefit) expense


(113
)


(0
)%


(758
)


(1
)%


5,139



7
%     Year

Year

YearEnded

Ended

EndedDecember 31,

December 31,

December 31,2006

2007

2008Decrease in earnings per ordinary share: Basic


0.17



0.58



0.06 Diluted


0.17



0.51



0.05  F-29




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    December 31,

December 31,2007

2008Deferred income tax assets :Pre-operating expenses


387



375Inventories


546



39,520Prepayments to suppliers, principally due to allowance for
    doubtful accounts






2,573Accruals






342Tax loss carryforwards


1,132



2,255Total gross deferred income tax assets


2,065



45,065Less: valuation allowance


(1,132
)


Deferred income tax assets, net of valuation allowance


933



45,065Deferred income tax liability-Plant and equipment, principally
    due to capitalized interest






(1,468
)Total gross deferred income tax liability






(1,468
)Net deferred income tax asset


933



43,597Classification on consolidated balance sheets:Deferred income tax assets: Current


546



44,690 Non-current


387



375Deferred income tax liability: Non-current






(1,468
)      F-30




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
            (17)
    COMMITMENTS
    AND CONTINGENCIES  (a)  Capital
    commitments
    December 31,

December 31,2007

2008Purchase of property, plant and equipment


566,495



1,072,108   (b)  Purchase
    commitments
    December 31,

December 31,2007

2008Future minimum purchases


170,721



165,155  F-31




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (c)  Litigation
          (18)
    REDEEMABLE
    CONVERTIBLE PREFERRED SHARES  Series A-1 (Series A-1 Shares) A-2 (Series A-2 Shares) A-1 A-2 Series A-1 Series A-1 Shares Series A-2 Shares
 F-32




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
          Series A-1 Shares, Series A-1 shares, Series A-1 Shares. Series A-1 Shares No. 00-27 No. 98-5
 F-33




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (19)
    ORDINARY
    SHARES  ten-for-one
              (20)
    STATUTORY
    RESERVE    (21)
    SHARE
    BASED COMPENSATION  Share
    options to employees
     F-34




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
                          Share
    options to non-employees
   F-35




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Share
    options to investors
  Series A-1 Series A-1
      2006

2007

2008Expected volatility

64%

46.36%~51.82%

49.81%~60.06%Expected dividends

0%

0%

0%Expected term

3.5~4.5 years

0.9~3.2 years

3.07~9.37 yearsRisk-free interest rate

4.9%

3.28%~4.81%

2.88%~3.85%Estimated fair value of underlying ordinary shares

US$4.37

US$7.98~US$44.75

US$14.32~US$43.30      F-36




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    WeightedNumber


Averageof Total


Exercise


Remaining


AggregateNon-





Shares Involved


Price


Contractual


IntrinsicEmployees


Employees


Investors


in the Option


per Share


Term


ValueFor the year ended December 31, 2006Granted


6,230,000



210,000



200,000



6,640,000


US$
4.45Exercised


















Forfeited or cancelled


(380,000
)










(380,000
)


Outstanding as of December 31, 2006


5,850,000



210,000



200,000



6,260,000


US$
4.45



4.6 years



Vested or expected to vest as of December 31, 2006


























Exercisable as of December 31, 2006


























For the year ended December 31, 2007Outstanding as of December 31, 2006


5,850,000



210,000



200,000



6,260,000


US$
4.45Granted during 2007


4,190,750











4,190,750


US$
17.71Exercised


(1,457,000
)










(1,457,000
)

US$
4.45Forfeited or cancelled


(403,400
)


(80,000
)






(483,400
)


Outstanding as of December 31, 2007


8,180,350



130,000



200,000



8,510,350


US$
10.50



3.9 years



310,699Vested or expected to vest as of December 31, 2007


1,980,766



43,333



200,000



2,224,099


US$
4.49



3.51 years



81,322Exercisable as of December 31, 2007


523,766



43,333



200,000



767,099


US$
4.57



3.53 years



32,557For the year ended December 31, 2008Outstanding as of December 31, 2007


8,180,350



130,000



200,000



8,510,350


US$
10.50Granted during 2008


464,300











464,300


US$
19.99Exercised


(2,065,696
)






(200,000
)


(2,265,696
)

US$
5.62Forfeited or cancelled


(310,455
)










(310,455
)


Outstanding as of December 31, 2008


6,268,499



130,000







6,398,499


US$
11.93



3.31 years



31,284Vested or expected to vest as of December 31, 2008


5,158,931



86,667



200,000



5,445,598


US$
8.78



2.72 years



71,121Exercisable as of December 31, 2008


1,636,235



86,667







1,772,902


US$
12.93



3.04 years



8,919        F-37




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (22)
    EARNINGS
    PER SHARE    Year

Year

YearEnded

Ended

EndedDecember 31,

December 31,

December 31,2006

2007

2008Numerator used in basic earnings per shareIncome from continuing operations attributable to holders of
    ordinary shares


25,885



139,122



70,223Plus accretion of Series A, Series B and Series C
    Shares to redemption value






4,937



Numerator used in diluted earnings per share


25,885



144,059



70,223Shares (denominator):Weighted average number of ordinary shares outstanding used in
    computing basic earnings per share


75,000,000



92,673,914



104,994,312Plus weighted average Series A, Series B and
    Series C Shares outstanding






6,616,165



Plus incremental weighted average number of ordinary shares from
    assumed conversion of stock options using the treasury stock
    method






5,569,360



4,246,126Weighted average number of ordinary shares outstanding used in
    computing diluted earnings per share


75,000,000



104,859,439



109,240,438Earnings per share  basic


0.35



1.50



0.67Earnings per share  diluted


0.35



1.37



0.64      F-38




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (23)
    SIGNIFICANT
    CONCENTRATIONS AND RISKS  Significant
    concentrations
    US$

EURO

RMB(000s)

(000s)

(000s)In mainland China


25,165



4,189



2,396,362In Hong Kong


6,472







Total in original currency


31,637



4,189



2,396,362US$ equivalent


31,637



5,920



350,622     December 31,

December 31,

December 31,2006

2007

2008Q-Cells AG


24



52,277



335,409Jiangsu Linyang Solarfun Co., Ltd.


14,654



64,644



130,447Suntech Power Holdings Co., Ltd.


41,899



35,335



55,795    F-39




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    December 31,

December 31,2007

2008Wacker Chenie AG


19,532



17,087GE Energy (USA) LLC


22



14,916Silex Photonics






12,082Komex Electronic Materials Inc.


19,275



Targray Technology International Inc.


17,474



4,615     Business
    and economic risks
         F-40




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  and/or
      Currency
    risk
      (24)
    RELATED
    PARTY TRANSACTIONS           F-41




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
                  (25)
    GEOGRAPHIC
    AND SEGMENT INFORMATION    Year

Year

YearEnded

Ended

EndedDecember 31,

December 31,

December 31,2006

2007

2008Mainland China


79,647



154,224



463,101Germany


96



56,210



418,671Taiwan


8,598



152,486



361,622Europe excluding Germany


3,290



49,289



196,000Asia Pacific excluding mainland China and Taiwan


8,518



63,809



132,866North America


5,305



47,928



71,235Total net revenue


105,454



523,946



1,643,495    F-42




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Year


Year


YearEnded


Ended


EndedDecember 31,


December 31,


December 31,2006


2007


2008Segment and consolidated revenue


105,454



523,946



1,643,495Segment income


36,229



149,227



31,496Reconciling items (note (a))


(6,160
)


(5,926
)


43,866Consolidated earnings before income taxes


30,069



143,301



75,362Segment assets (note (b))






1,306,581



3,452,925   (a)  Reconciliation
    of segment income to consolidated earnings before income
    tax
  Year

Year

YearEnded

Ended

EndedDecember 31,

December 31,

December 31,2006

2007

2008Total segment income


36,229



149,227



31,496PRC GAAP to US GAAP differences:Pre-operating expenses


309







Share-based compensation


(2,028
)






Discount amortization on the exchangeable notes


(4,440
)






Interest on exchangeable notes


(13
)






Decrease in fair value of warrants


9



2



Change of fair value of foreign currency forward contracts






(3,357
)


(2,510
)Change of fair value of interest rate swap contract






525



Change in fair value of prepaid forward contracts










60,028Interest expenses for convertible senior notes and amortization
    of convertible senior notes issuance costs










(10,204
)Others


3



(3,096
)


(3,448
)Consolidated earnings before income taxes


30,069



143,301



75,362   (b)  Reconciliation
    of total segment assets to consolidated total
    assets
  December 31,

December 31,2007

2008Total segment assets


1,306,581



3,365,525Cash and other current assets of the Company


24,881



34,301Cash and other receivables of LDK International


3,315



7,385Cash and other assets of LDK US


597



267Interest capitalized at consolidation level






5,747Elimination of inter-companies balances within the Group


(25,388
)


(39,497
)Consolidated total assets


1,309,986



3,373,728  F-43




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (26)
    LDK SOLAR
    CO., LTD. (PARENT COMPANY)        paid-up
    Condensed
    Balance Sheets
  December 31,

December 31,2007

2008Cash and cash equivalents


527



167Due from subsidiaries


24,143



25,370Other current assets


211



Investment in subsidiaries


621,267



1,133,890Debt issuance costs






8,764Total assets


646,148



1,168,191Accrued expenses and other payables


2,894



4,271Due to subsidiaries


442



7,022Deferred revenue


2,222



1,990Convertible senior notes






400,000Total shareholders equity


640,590



754,908Total liabilities and shareholders equity


646,148



1,168,191    F-44




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Condensed
    Statements of Income
  From May 1,

Year

Year2006 to

Ended

EndedDecember 31,

December 31,

December 31,2006

2007

2008General and administrative expenses






(3,293
)


(3,757
)Interest income


4



2,139



50Interest expense, amortization of discount on exchangeable notes
    and amortization of convertible senior notes issuance costs


(4,454
)






(10,204
)Change in fair value of prepaid forward contracts










60,028Others










(32
)Decrease in fair value of warrant


9



2



(Loss)/earnings before income tax and equity in earnings from
    subsidiaries


(4,441
)


(1,152
)


46,085Equity in earnings from subsidiaries


34,623



145,211



24,138Net income


30,182



144,059



70,223Accretion of Series A redeemable convertible preferred
    shares to redemption value


(814
)


(860
)


Accretion of Series B redeemable convertible preferred
    shares to redemption value


(1,799
)


(2,726
)


Accretion of Series C redeemable convertible preferred
    shares to redemption value


(116
)


(1,351
)


Deemed dividend to Series A redeemable convertible
    preferred shareholders


(1,568
)






Net income available to ordinary shareholders


25,885



139,122



70,223  F-45




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Condensed
    Statements of Cash Flows
  From May 1,

Year

Year2006 to

Ended

EndedDecember 31,

December 31,

December 31,2006

2007

2008Cash flows from operating activitiesNet income


30,182



144,059



70,223Adjustments to reconcile net income to net cash used in
    operating activities:Interest on the exchangeable notes


13







Amortization of discount on exchangeable notes


4,440







Amortization of convertible senior notes issuance costs










2,493Decrease in fair value of warrants


(9
)


(2
)


Equity in earnings from subsidiaries


(34,623
)


(145,211
)


24,138Change in fair value of prepaid forward contracts










(60,028
)Changes in operating assets/liabilities:Due from subsidiaries


(2,149
)


(21,994
)


(1,227
)Due to subsidiaries






442



6,580Other assets/liabilities






4,996



1,356Net cash used in operating activities


(2,146
)


(17,710
)


43,535Cash flows from investing activitiesInvestment in subsidiaries


(82,600
)


(347,256
)


(436,833
)Net cash used in investing activities


(82,600
)


(347,256
)


(436,833
)Cash flows from financing activitiesProceeds from issuance of ordinary shares


10



369,489



205,104Payment of expenses relating to share offer


(405
)


(4,174
)


(1,472
)Proceeds from issuance of exchangeable notes, net of issue cost
    US$52


7,948







Proceeds from
    Series A-2
    redeemable convertible preferred shares, net of issue cost US$51


6,949







Proceeds from Series B redeemable convertible preferred
    shares, net of issue cost US$78


47,922







Proceeds from Series C redeemable convertible preferred
    shares


22,500







Payment for Companys ordinary shares under prepaid forward
    contract










(199,437
)Proceeds from issuance of convertible senior notes, net of
    issuance cost










388,743Net cash provided by financing activities


84,924



365,315



392,938Net increase (decrease) in cash and cash equivalents


178



349



(360
)Cash and cash equivalents at beginning of year






178



527Cash and cash equivalents at end of year


178



527



167  F-46




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (27)
    FAIR
    VALUE MEASUREMENTS  (a)  Fair
    Value Hierarchy
    
    Level 1 inputs are quoted prices (unadjusted) in active
    markets for identical assets or liabilities that management has
    the ability to access at the measurement date. An active market
    for the asset or liability is a market in which transactions for
    the asset or liability occur with sufficient frequency and
    volume to provide pricing information on an ongoing basis. A
    quoted price in an active market provides the most reliable
    evidence of fair value and shall be used to measure fair value
    whenever available.
    Level 2 inputs are inputs other than quoted prices included
    in Level 1 that are observable for the asset or liability,
    either directly or indirectly. Level 2 inputs may include
    quoted prices for similar assets and liabilities in active
    markets, as well as inputs that are observable for the asset or
    liability (other than quoted prices), such as interest rates,
    foreign exchange rates, and yield curves that are observable at
    commonly quoted intervals.
    Level 3 inputs are unobservable inputs for the asset or
    liability, which are typically based on an entitys own
    assumptions, as there is little, if any, related market activity.    (b)  Fair
    Value of Financial Instruments
    
    Short-term financial instruments (cash equivalents, pledged bank
    deposits, trade accounts receivable and payable, bills
    receivable and payable, short-term bank borrowings, and accrued
    liabilities)  cost approximates fair value because of
    the short maturity period.
    Long-term bank borrowings  fair value is based on the
    amount of future cash flows associated with each debt instrument
    discounted at the Groups current borrowing rate for
    similar debt instruments of comparable terms. The carrying
    values of the long term loans approximate their fair values as
    all the long-term debt carries variable interest rates which
    approximate rates currently offered by the Companys
    bankers for similar debt instruments of comparable maturities.
    Foreign exchange forward contract  fair value is
    determined by discounting estimated future cash flow, which is
    based on the changes in the forward rate.
    Interest rate swap contract  fair value is based on
    the quotation from the financial institution.
    Convertible senior notes  the estimated fair value of
    convertible senior notes was US$ 324,178 as of December 31,
    2008 and was determined by discounting the future cash flows at
    rate that reflects, among other things, market interest rates
    and the Companys credit standing. F-47




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     CarryingAmount at

Fair Value atDecember 31,

December 31,

Fair Value Measurements Using2008

2008

Level 1

Level 2

Level 3Asset:Interest rate swap contract


100



100







100



Liability:Foreign exchange forward contract


(102
)


(102
)






(102
)


       (28)
    DERIVATIVE
    FINANCIAL INSTRUMENTS       F-48




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        Asset Derivatives

Liability DerivativesDecember 31,

December 31,

December 31,

December 31,2007

2008

2007

2008Balance



Balance



Balance



BalanceSheet

Fair

Sheet

Fair

Sheet

Fair

Sheet

FairLocation

Value

Location

Value

Location

Value

Location

ValueDerivatives not designated as hedging instruments under
    SFAS No. 133 Interest rate swap contracts


Other
    financial
    assets



525



Other
    current
    assets



100















 Foreign exchange forward contracts


















Other
    financial
    liabilities



(3,357
)


Other
    financial
    liabilities



(102
)Total derivatives






525







100







(3,357
)






(102
)     Amount of Gain or (Loss)Recognized in Income onDerivativesLocation of Gain or (Loss) Recognized in

Year Ended December 31Derivatives Not Designated as Hedging Instruments Under SFAS
    No. 133

Income on Derivatives

2007

2008Interest rate swap contracts

Interest expenses


507



(407
)Foreign exchange forward contracts

Foreign currency exchange (loss)/gain, net


(3,357
)


(2,612
)Total




(2,850
)


(3,019
)     (29)
    SUBSEQUENT
    EVENT  LQ
    Energy Gmbh
   F-49




---



##### Table of Contents



LDK SOLAR
    CO., LTD. AND SUBSIDIARIES
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   F-50