Why United Solar’s polysilicon plant in Oman halts production

Shortly after ramp-up started in February, new entrant United Solar Polysilicon is shutting down production at its 100,000-ton polysilicon plant near Sohar Port in Oman for half a year as demand falls short of expectations.

Analysis by Johannes Bernreuter, Head of Bernreuter Research

An insider has confirmed rumors that United Solar Polysilicon is shutting down production at its factory in Oman for six months starting in October. The company had begun to ramp up 50% of its capacity of 100.000 metric tons in February and is now planning to implement some technical upgrades. Reportedly, United Solar has concluded less long-term sales contracts than anticipated and is suffering from losses and resulting cash-flow constraints.

The temporary shutdown does not come as a surprise. When the company announced in January 2024 it would build a 100,000-ton polysilicon factory for the non-Chinese market, I queried that. Because I wondered where United Solar wanted to find customers for a capacity that is larger than the total polysilicon demand for US-destined solar modules.

What might be other target markets than the USA?

• The European Union? The EU’s forced labor regulation, which could drive demand for solar modules made of non-Chinese polysilicon, will only come into effect in December 2027.
• India? As long as the country’s aim to reduce its dependency on Chinese polysilicon is not enshrined in statutory provisions, this is not an overly compelling business case.
• Australia? Not a really big market.

The market for non-Chinese polysilicon has been limited so far

The logic conclusion for United Solar would be cut-throat competition with the existing non-Chinese polysilicon makers Hemlock Semiconductor, Wacker and OCI TerraSus on price, based on the lower production costs in Oman.

But obviously, it is not so easy for a newbie to quickly gain market shares from competitors that largely operate with long-term sales contracts.

On top of that comes bad timing: When United Solar started to ramp up production in February 2026, the market for non-Chinese polysilicon was paralyzed by the uncertainty about the outcome of the US Section 232 investigation.

United Solar still has a chance to gain ground: If Elon Musk’s gigawatt fantasies of huge solar factories in the US get real, his companies Tesla and SpaceX will need significant volumes of non-Chinese polysilicon. Maybe, a large portion will come from United Solar.