US trade case to make or break Wacker’s solar polysilicon unit

While OCI TerraSus is relatively confident about the prospects for its polysilicon plant in Malaysia, German competitor Wacker has made the future of its solar-grade polysilicon business dependent on the outcome of the U.S. Section 232 investigation of polysilicon imports. Wacker experienced a severe slump of solar-grade shipments in 2025, whereas the earnings before interest, taxes, depreciation and amortization (EBITDA) of OCI TerraSus rebounded strongly in the fourth quarter. Chinese producer Daqo New Energy benefitted from the price increase on the domestic polysilicon market in the second half of 2025.

• Wacker stabilized its earnings in the fourth quarter – at least at first sight: The EBITDA margin of its polysilicon division rose lightly from 8.9% in the third quarter to 9.3% in the fourth. If one takes out a EUR18.9 million (US$22 million) benefit from the production tax credits under the U.S. Inflation Reduction Act (IRA), however, the EBITDA margin drops to 0.8%.
  Wacker is more and more focusing on the production of electronic-grade polysilicon for the semiconductor industry; volumes and sales were up by a “double-digit percentage” year over year, driven by strong demand for semiconductors from data centers and artificial intelligence applications.
  By contrast, the uncertainty about the PV market in the United States, the main destination of solar modules made of non-Chinese polysilicon, has left deep marks on Wacker’s solar-grade polysilicon business. Polysilicon exports from its two German plants in Burghausen, Bavaria and Nünchritz, Saxony crashed from nearly 47,000 metric tons (MT) in 2024 by 42% to around 27,000 MT in 2025; hence, the share of electronic grade exceeded that of solar grade in the 2025 product mix.
  Especially pronounced was the drop at the large solar-grade destinations: China (-60%), Vietnam (-68%) and Malaysia (-90%). Conversely, exports to typical semiconductor wafer fab locations showed strong growth: South Korea (+75%), Singapore (+98%), USA (+20%), Italy (+59%) and Finland (+63%).
  As a result, annual polysilicon sales declined from EUR949 million (US$1,027 million) in 2024 by 7% to EUR883 million (US$998 million) in 2025. Mainly due to higher costs resulting from the low plant utilization, the annual EBITDA margin (including the IRA benefit) slumped from 20.4% in 2024 to 10.9% in 2025. For 2026, the management expects a margin close to 10%.
  The future of Wacker’s solar-grade polysilicon business now hinges upon the outcome of the national security investigation of imports of polysilicon and its derivatives under Section 232 of the U.S. Trade Expansion Act. Originally, a decision was already expected for the end of 2025; now there are indications that the result might not be released before May 2026.
  For the case that the outcome should not be positive for Wacker, CEO Christian Hartel has announced: “Then we have to take a decision to step out of the solar space and to close one of our sites.” In other words, the solar-grade polysilicon plant in Nünchritz would be shut down then.
• OCI TerraSus (formerly OCI Malaysia) has returned to black territory. After the shutdown from May through August due to weak demand, the company’s 35,000 MT plant achieved a high utilization rate of 90% in the fourth quarter. Consequently. the operating income soared from minus KRW64.7 billion (US$46.6 million) in the third quarter to a positive KRW33.2 billion (US$22.9 million) in the fourth. Revenues also increased from KRW131.5 billion (US$94.8 million) to KRW144.9 billion (US$100 million).
  We estimate that the company’s EBITDA margin rebounded from -41% in the previous quarter to approx. +30%; the annual. margin came in at about -11%. Although some customers delayed orders amid market uncertainty about the postponed decision in the U.S. Section 232 case, OCI TerraSus continued to report stable demand from companies that import solar products into the United States.
  In the seasonally weak first quarter, the manufacturer is carrying out regular maintenance, which will reduce the utilization rate of its plant to approx. 50%.
• Daqo New Energy further improved its performance in the forth quarter after the return to a gross profit in the third. Its EBITDA margin rose from 18.7% in the previous quarter to 23.7%.
  The company was able to drive down its cash costs slightly by 2% from $4.54/kg in the third quarter to $4.45/kg in the fourth; beside lower energy costs, the higher utilization of its plants played a major role as the output jumped from 30,650 MT in the third quarter by almost 38% to 42,181 MT.
  However, Daqo’s sales volume declined from 42,406 MT in the previous quarter to 38,167 MT. Its average selling price increased only slightly from $5.80/kg to $5.83/kg because part of the output from the production ramp-up was of lower quality and was sold at a discount.
  The company more than halved the net loss attributable to its shareholders from $345.2 million in the full year of 2024 to $170.5 million in 2025. Its cash balance, short-term investments and bank deposits even increased from $2.2 billion at the end of 2024 to $2.27 billion at the end of 2025.
  Daqo is planning to keep its output within a range of 35,000 MT to 40,000 MT in the first quarter of 2026 and to produce a volume of 140,000 MT to 170,000 MT this year. Although China’s State Administration for Market Regulation has stopped the industry’s planned acquisition fund for excess production capacity, Daqo’s management still believes that the platform company founded by major Chinese polysilicon manufacturers in December 2025 will become active in the coming quarters.