Hoku reported that it expected the subzone status would contribute to the facility's long-term global competitiveness, explaining that FTZ procedures would exempt the Company from customs duty payments on foreign materials used in export production.

Specifically, the ruling will allow Hoku to import foreign-sourced raw materials in a duty-free status, provided they are destined for export overseas as components of finished polysilicon. Under its existing customer supply agreements, more than 80% of Hoku's total annual production capacity of polysilicon, and 100% of what has been presold to date, is destined for export to China, meaning that an equivalent percentage of the Company's raw material inputs would be eligible for import in a duty-free status.

Hoku explained that it had been granted subzone status under the existing Foreign Trade Zone established for Boundary County in Northern Idaho, the only FTZ in the state. Hoku Materials' facility will be the only designated Foreign Trade Subzone in Idaho.

"We are pleased to have been granted the Foreign Trade Subzone status," said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. "This ruling helps ensure that our facility will remain globally competitive over time."

"For many reasons, Hoku is a unique case study in today's economy," said Gynii Gilliam, Executive Director of the Bannock Development Corporation. "Hoku's Pocatello plant will not only be a net exporter to China, but thanks to the Commerce Department's ruling, it will have the ability to compete internationally on a level playing field. This outcome is not only good for Idaho's emerging clean energy manufacturing base, but it is good for the U.S. renewable energy industry in general."

When complete, the Hoku Materials facility is expected to produce up to 4,000 metric tons of polysilicon per year.

About Hoku Scientific, Inc.

Hoku Scientific (NASDAQ: HOKU) is a diversified clean energy technologies company with three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. Hoku Materials plans to manufacture, market, and sell polysilicon for the solar market from its plant currently under construction in Pocatello, Idaho. Hoku Solar markets, sells, and installs turnkey photovoltaic systems in Hawaii.