BUSINESS

China’s Polysilicon Industry Slashes Output to Record Lows as Prices Collapse

Published: May. 16, 2025 6:05 a.m. GMT+8

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China’s polysilicon producers are cutting output to record low levels as prices collapse amid a massive oversupply that is pushing the solar supply chain into its deepest downturn in years.

China’s polysilicon producers are cutting output to historically low levels, with average operating rates dropping below 40%, as a prolonged supply glut and plunging prices push the solar supply chain into its deepest downturn in years.

Lv Jinbiao, deputy director of the Expert Committee of the Silicon Industry Branch under the China Nonferrous Metals Industry Association, told Caixin that most producers began scaling back production as early as the second half of 2024.

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Chinese polysilicon producers have cut their average operating rates below 40% as overcapacity and plummeting prices hit the solar supply chain, pushing prices below cash costs for most producers.
Rumors of major producers consolidating capacity led to brief share rallies but skepticism remains due to financial struggles and strong parent backing of mid-tier firms.
Global polysilicon production exceeds 3 million tons, far outpacing projected 2025 solar installations of 700 GW, while major firms report significant losses amid ongoing industry overcapacity.

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Who’s Who

Xinjiang Daqo New Energy Co. Ltd.: Xinjiang Daqo New Energy Co. Ltd. is a leading Chinese silicon producer. Amid the ongoing market downturn, the company's capacity utilization has fallen to 30%-40%, aligning with the industry average. Daqo has scaled back production, suspended expansion plans, and is focusing on inventory clearance. Shares surged briefly on consolidation rumors but later declined. The company lost over 2.72 billion yuan last year and is considering further operational adjustments due to weak demand and low prices.

Tongwei Co. Ltd.: Tongwei Co. Ltd. is a major Chinese polysilicon producer currently facing significant challenges due to oversupply and falling prices. The company reported a 2024 net loss of 7.04 billion yuan, its first annual loss since listing. Tongwei’s share price recently fluctuated amid rumors of industry consolidation efforts. Company executives acknowledge the supply-demand mismatch and support exploring solutions, but sustained recovery depends on prices rising above manufacturing costs.

GCL Technology Holdings Ltd.: GCL Technology Holdings Ltd. is identified in the article as one of China's six leading polysilicon producers. It is reportedly involved in discussions, along with other top firms, about a potential “storage and consolidation” plan aimed at absorbing excess capacity and supporting prices in the polysilicon sector amid significant oversupply and falling prices.

Xinte Energy Co. Ltd.: Xinte Energy Co. Ltd. is named in the article as one of China’s six leading polysilicon producers. Amid a severe supply glut and declining prices, Xinte is reportedly involved in discussions—alongside other top producers—about a potential "storage and consolidation" plan to absorb excess polysilicon capacity and stabilize prices by limiting output, though the plan faces significant practical challenges.

East Hope Group Co. Ltd.: East Hope Group Co. Ltd. is identified in the article as one of China’s six leading polysilicon producers. It was mentioned as a potential participant in industry consolidation efforts aimed at absorbing excess capacity and supporting prices, alongside Tongwei, Daqo, GCL Technology Holdings, Xinte Energy, and Asia Silicon. However, details about East Hope’s individual performance or actions were not specifically provided.

Asia Silicon Co. Ltd.: Asia Silicon Co. Ltd. is identified as one of the six leading polysilicon producers in China. The company was mentioned as a potential participant in rumors regarding an industry plan for “storage and consolidation” to absorb excess capacity and stabilize prices. However, there is no specific information in the article about Asia Silicon’s financial performance or strategic actions beyond its inclusion in this group of top producers.

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