OCI stops polysilicon production in Korea after hefty impairment

The price pressure from low-cost Chinese polysilicon plants has caused its most prominent casualty so far: OCI, the world’s second-largest polysilicon manufacturer, will stop producing solar-grade polysilicon at its factory in Gunsan, South Korea, which has a capacity of 52,000 metric tons (MT).

Hanwha Chemical, the second remaining polysilicon producer in Korea, is also mulling the closure of its 15,000 MT plant, according to Korean media reports.

OCI will shut down its polysilicon factory in Gunsan  on February 20. After revamping its P1 plant, the company will only produce electronic-grade polysilicon for the semiconductor industry there anymore, beginning in May. OCI is targeting an annual output of 1,000 MT this year and 5,000 MT in 2022.

OCI’s 27,000 MT solar-grade polysilicon plant in Malaysia, which enjoys a significantly lower electricity rate than the Gunsan factory, is slated to increase production by 10% over 2019.

At the presentation of its fourth-quarter results on February 11, OCI reported a hefty impairment of KRW750.5 billion (US$632 million) on the polysilicon assets in Gunsan due to the market price erosion.

See also Opinion: OCI hoists white flag against Chinese state capitalism