Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of [Lu Heung] from Merrill Lynch.
Lu Heung - Merrill Lynch
I just want to know -- you raised the revenue guidance for the year but you didn’t really raise the shipment guidance nearly as much. I just want to see what your thoughts are -- is it because the second half ’08 ASP being stronger than what you expected? Or can you provide more color?
Terry Wang
Okay, actually I just want to point out, we raised both the revenue guidance and shipment guidance but revenue guidance compared to the previous guidance is up about close to 10% and the shipment guidance compared to the previous guidance is up about 5%, so the difference between the increase because of how upside ASP and given the current contracts signed and also the market orders we received, particularly for this quarter, and visibility for next quarter as well, and that comes from the high demand of product, especially in the end market, such as the Italy market, German and other, the emerging markets as well.
Lu Heung - Merrill Lynch
I have a question on the 2009 demand, based on the contracts that you signed. Maybe you can give some more details on what is the percentage of contract that you signed from each country, and also you indicated your polysilicon costs will reduce quite significant in 2009. Maybe can you quantify that?
Andy Klump
I’ll take that question. We have very strong customers that we’ve been working with the last several years and we’ve continued to extend these relationships. Particularly markets like Italy are going to be very important for us next year. We have approximately a third, say 30% to 35% of our contracts next year in Italy. Germany also roughly about 30%, we expect. Spain will most likely be a smaller percentage in the latter half of this year into 2009 but just in aggregate, we’ve signed roughly 50%, as I mentioned, and we have roughly 20% which are at fixed prices. And these prices only represent a fairly small decline off of our current levels. We are looking at roughly 3% to 5%.
Now, in terms of our polysilicon cost reductions, we have long-term contracts and so the overall result of these contracts will be roughly about a 15% price decline, so we see in aggregate that the pricing or the cost decline from our polysilicon savings. This will give us a much better position to be able to accept any type of ASP decline.
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