Opinion: Chinese polysilicon makers are posing their muscles
By Johannes Bernreuter, Head of Bernreuter Research
It is typically Chinese style to announce new factories with a capacity that is double as big as the actual construction site. Asia Silicon is building a new polysilicon plant with a capacity of 60,000 metric tons (MT)? Of course, the manufacturer is only implementing the first 30,000 MT phase. When the second phase of such a project gets built usually depends on “market development.”
Tongwei did the same with its polysilicon plants in Sichuan and Inner Mongolia. In February 2020, however, the company made an announcement that deviated from the typical pattern: Tongwei proclaimed a huge total polysilicon capacity target of 220,000 to 290,000 MT by 2023.
If this announcement was supposed to impress or even deter competitors, it only worked with OCI, who shut down its solar-grade production facilities in South Korea and is expanding the capacity of its second polysilicon plant in Malaysia only slowly from 30,000 MT in 2020 to 35,000 MT in 2022.
In contrast, Chinese manufacturers now seem to vie like bodybuilders for the prize of the biggest muscles:
- In October 2020 GCL-Poly celebrated the groundbreaking for a 100,000 MT fluidized bed reactor (FBR) plant to produce granular polysilicon in Leshan, Sichuan province. On February 28, 2021, the company disclosed that the capacity of the first phase will be 60,000 MT.
- On February 8, Xinte Energy announced plans to build a new polysilicon plant with a total production capacity of 200,000 MT in Baotou, Inner Mongolia. The first phase – you guess it – will have a capacity of 100,000 MT.
- On February 28, GCL-Poly hit back with the announcement of a 300,000 MT FBR plant in Inner Mongolia, to be built in a joint venture with wafer manufacturer Wuxi Shangji Automation. “Innovation”: The factory is planned to be constructed in three phases, of which the first will only comprise 60,000 MT.
That doesn’t lack unintentional hilarity: GCL-Poly appears like the smallest kid on the school yard who pretends to have the biggest muscles. The company’s subsidiary GCL New Energy just defaulted on a US$500 million bond, and now the parent corporation announces a 300,000 MT polysilicon project with a total investment of US$2.8 billion. Wow!
It requires the arts of a financial vabanque player like GCL to accomplish all these projects. On top of that, GCL’s polysilicon subsidiary Jiangsu Zhongneng still has to prove that it can successfully ramp up its FBR capacity from 10,000 MT to 54,000 MT.
But sarcasm aside: A PV market with annual new installations that are at least 30 GW higher than they were in the previous year needs an additional polysilicon production capacity of 100,000 MT annually. That’s the serious background of the Chinese muscle posing.
- Asia Silicon
- fluidized bed reactor
- Inner Mongolia
- production capacity
- PV installations
- Xinte Energy
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