Polysilicon margins improve across the board in third quarter

Both Chinese and non-Chinese polysilicon manufacturers increased their earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter, albeit to varying degrees. While Chinese Daqo New Energy and Germany-based Wacker still struggled with market conditions, OCI TerraSus in Malaysia built on its good performance achieved in the second quarter.

• OCI TerraSus (formerly OCI Malaysia) significantly improved its result after its 35,000 MT plant had returned from regular maintenance to full production in the second quarter.
  Revenues jumped from KRW109.3 billion (US$72.8 million) in the previous quarter by 48.4% to KRW162.2 billion (US$114.5 million) in the third. At KRW20.8 billion (US$14.7 million), the operating income became positive again after a loss of KRW3.5 billion (US$2.3 million) in the second quarter. Accordingly, the EBITDA margin rose from 19.9% to 25.6%.
  Although the market remained cautious ahead of the implementation of minimum import prices and import duties under Section 232 of the US Trade Expansion Act on December 4, OCI TerraSus increased spot sales to key customers by 45% and raised its average selling price slightly. In the fourth quarter, the company expects a further rise of sales as it is negotiating with a US customer for a new long-term contract.
  OCI’s new Vietnamese wafer subsidiary NeoSilicon Technology is making initial shipments to manufacturers of solar cells that are destined for the US, and is planning to start shipments to long-term contract customers in the first quarter of 2027. Beyond the US, NeoSilicon is targeting new customers in countries like Turkey and Taiwan.
• Wacker also improved its earnings, but only due to a one-off effect: Special income of €35 million (US$40.3 million) from the cancelation of a solar-grade polysilicon contract lifted the EBITDA margin of the company’s polysilicon division up from 5.0% in the second quarter to 19.5% in the third.
  Excluding this non-recurring item, however, the operating EBITDA rate declined to 3.9%. At €224.9 million (US$258.8 million), quarterly sales have remained roughly on the same level for one year now.
  While its plants are still running at a low utilization rate, the division was able to further reduce its solar-grade polysilicon inventories by 25% compared to one year ago. As fixed costs that get buried in inventory are recognized when this inventory is sold, however, the depletion has a negative impact on the financial result.
  Wacker’s sales of electronic-grade polysilicon for the semiconductor industry are rising with a double-digit growth rate, whereas volumes of solar-grade polysilicon continue to decline. “It is a very unsatisfying performance because we are running mostly on semiconductor as a portfolio, and we have a structural setup for semiconductor and solar,” Wacker’s CFO Tobias Ohler said at the conference call with analysts about the third-quarter result.
  CEO Christian Hartel repeated the statement he already made at the company’s Capital Markets Day on September 17: The US Section 232 proclamation “does not incentivize the use of US-made polysilicon and hence is a disappointment for us.” As most of the solar wafer production capacity is located outside the US, Hartel stressed that “the framework needs to have an incentive that people outside of the US buy the material in the US and then send the cells or the wafers or the modules back.”
• Daqo New Energy made further progress in reducing its quarterly losses. As the sales volume more than tripled from 15,190 metric tons (MT) in the second quarter to 46,910 MT in the third, the EBITDA margin improved from negative 46.8% in the previous quarter to negative 4.7%. The result was also supported by lower inventory impairment provisions.
  Although China’s market regulator threatened measures against selling polysilicon below production costs on July 31, Daqo’s average selling price rose only marginally from US$4.04/kg in the second quarter to $4.12/kg because shipments fulfilled orders already signed before late July. Thus, the price stayed far below the company’s production costs even though those declined from $5.95/kg to $5.37/kg (cash costs of $4.23/kg plus depreciation of $1.14/kg) through a technical upgrade, reduced energy consumption and a lower silicon metal price.
  As Daqo’s output increased from 43,675 MT to 53,469 MT, it still remained above both its sales volume and its previous guidance of 40,000 MT to 45,000 MT. Consequently, the company’s inventories swelled by 73,964 MT in the first three quarters of 2026.
  For the fourth quarter, Daqo’s production target comprises a wide range of 35,000 MT to 45,000 MT, depending on how “the industry peers can come to the actual action of jointly reducing utilization,” CFO Ming Yang explained. Accordingly, Daqo’s annual output will lie between 175,000 MT and 185,000 MT.