Polysilicon Industry Faces Third Shakeout Wave

WUERZBURG, Germany - Nov. 28, 2023 - PRLog -- Chinese polysilicon market leader Tongwei will usher in a phase of fierce cut-throat competition in 2024. "Tongwei is planning to bring 575,000 tons of new production capacity on stream next year, whereas we expect a market growth of 200,000 tons at most," says Johannes Bernreuter, head of Bernreuter Research and author of the Polysilicon Market Outlook 2027, which was released today.

The polysilicon shortage in 2021 and 2022, which drove the spot price up to almost US$40/kg, has lured many Chinese aspirants into the industry. The new report from polysilicon market expert Bernreuter Research screens 36 companies; among them, 14 have started to construct or already to ramp up a new polysilicon plant. Besides Tongwei, however, other leading manufacturers have also expanded production. "If all new capacities were ramped up in 2024, oversupply would swell to 1.4 million tons," says Bernreuter. "With its low manufacturing costs and proven product quality, Tongwei will push most, if not all, new entrants out of the market."

For 2024, Bernreuter expects the polysilicon price to undercut the all-time low of US$6.75/kg reached in June 2020.

While China's share in the global polysilicon output will further increase to 90% in 2023 (to even 92.5% in solar-grade material), the non-Chinese manufacturers Wacker, OCI, Hemlock Semiconductor and REC Silicon will remain exempt from the shakeout. The reason for that is the Uyghur Forced Labor Prevention Act in the United States, which bans products from the Xinjiang Uyghur Autonomous Region in northwestern China. The legislation has created a separate, higher-price market for non-Chinese polysilicon manufacturers, which do not use silicon metal from Xinjiang as feedstock.

The shakeout in China is coming even though the polysilicon industry's largest customer, the solar sector, is growing rapidly. In contrast to other market researchers, Bernreuter assumes that annual PV installations will rise from 425 GW in 2023 to 1,100 GW in 2027, which is equivalent to an average annual growth rate of 26.8%. "Traditional forecast models have mostly underestimated PV growth. Therefore, we have adopted a more aggressive approach," explains the analyst. The rapid growth will fuel strong demand for silicon metal, which is made of quartz (SiO2). "The consequence is inevitable: Quartz for silicon metal will run short in the second half of this decade," predicts Bernreuter.

More details on the polysilicon, solar and semiconductor markets are provided in The Polysilicon Market Outlook 2027. For more information on the 102-page report, please go to:
https://www.bernreuter.com/polysilicon/industry-reports/p...