Polysilicon Market on the Brink of Dynamic Growth

WUERZBURG, Germany - Dec. 10, 2020 - PRLog -- After three years of nearly stagnant demand, the polysilicon industry is entering a new phase of dynamic growth. "As photovoltaic power plants have become the cheapest source of energy, global PV installations will increase in the coming years more rapidly than many think today. This will drive the demand for polysilicon," says Johannes Bernreuter, head of Bernreuter Research and author of the Polysilicon Market Outlook 2024, the new report from the polysilicon market expert.

While supply constraints are almost certain in 2021, Bernreuter sees a risk of upcoming oversupply in 2022, which will intensify in 2023. "In order for the market to remain balanced, global PV installations would have to grow by 30% annually both in 2022 and 2023 to reach 270 GW in 2023. That is not impossible, but would require the PV market to speed up enormously," says the analyst, who expects an installation volume of 127 GW in 2020.

The huge polysilicon volumes will come from the massive capacity expansion of the big Chinese polysilicon manufacturers – led by Tongwei, which has superseded German incumbent Wacker as the world's largest producer in 2020. This expansion is fueled by the strongly rising demand for mono-grade polysilicon in general and the rapid growth of Longi and Zhonghuan Semiconductor, the two largest makers of monocrystalline solar wafers, in particular.

As a result, 14 small and medium-sized Chinese polysilicon companies, which mainly produced lower grade for multicrystalline wafers, were pushed out of the market between 2017 and 2019; in addition, all three South Korean polysilicon manufacturers have abandoned production of solar-grade material; U.S.-based REC Silicon has mothballed its plant and Hemlock Semiconductor has halved its production capacity. In total, the second shakeout wave in the polysilicon industry has eliminated a capacity of around 275,000 metric tons (MT), compared to 135,000 MT during the first wave between late 2010 and early 2013. Consequently, China's share in global polysilicon production – including electronic grade for semiconductors – has increased from little more than 50% in 2017 to nearly 75% in 2020.

Among the big Chinese players, GCL-Poly is boldly betting on fluidized bed reactor (FBR) technology to produce polysilicon granules in two new, large plants. "It still remains to be seen if GCL can smoothly ramp up its new capacities. But no matter which scenario ultimately comes true, all the new Chinese low-cost plants will drive the polysilicon spot price down to values below US$8 or even US$7 per kilogram in 2022," predicts Bernreuter.

For more information on The Polysilicon Market Outlook 2024, please go to:
https://www.bernreuter.com/polysilicon/industry-reports/p...