On March 15, major Chinese polysilicon supplier Daqo held a ceremony marking the commissioning of the phase 1 of its polysilicon project in Inner Mongolia and the groundbreaking of the phase 2. Both phases are set to have a production capacity of 100,000 tons per year for high-purity polysilicon. This event was first reported by other Chinese renewable energy websites.
According to the reporting by various media outlets, Daqo and the government of Jiuyuan District of Batou signed a project investment agreement on December 18, 2021. Under the agreement, Daqo will land a project for the manufacturing of high-purity polysilicon and a project for the manufacturing of electronics-grade polysilicon in the local industry park. The former is designed to have a production capacity of 200,000 tons per year, and the latter is designed to have a production capacity of 21,000 tons per year. Both projects will be built in two phases.
Regarding the polysilicon project, the phase 2 entails an investment of RMB 9.2 billion and is scheduled for completion by the end of this year. Once this project is in full operation, Daqo’s total production capacity for high-purity polysilicon is projected to reach 305,000 tons per year. On the whole, enlarging the scale of production is totally in line the trends of lowering costs and increasing efficiency in the global PV market. Furthermore, the new polysilicon project will contribute to the upgrading of PV technologies and the whole PV industry in China. At the same time, it will encourage the growth of the local PV industry cluster and other forms of high-quality economic development in Baotou, which is becoming a “green silicon city” in words of Chinese news media.
The two projects in Baotou is being developed by Inner Mongolia Daqo New Energy, a wholly-owned subsidiary of Xinjiang Daqo New Energy. Inner Mongolia Daqo was registered as a company located in Jiuyuan District in 2021. It mainly engages in the manufacturing and sales of high-purity polysilicon and electronics-grade polysilicon. Hence, it resides in the most upper portion of the PV industry chain. Daqo’s offerings have been widely adopted within the PV and semiconductor industries.
Daqo touts that it deploys advanced manufacturing processes for silicon materials in China and attains yield rates exceeding 99%. Its electronic grade polysilicon reaches the top tier of the national standards. At the same time, Daqo is the leading domestic supplier for materials used in N-type mono-Si products. In particular, the new polysilicon project in Baotou is expected to establish a continuous and stable flow for the industrial production of electronics-grade polysilicon that is used to make semiconductor chips. Daqo stated that this project represents a breakthrough that will overcome the quality-related issues that affected domestic suppliers for electronics-grade polysilicon. Furthermore, the project could finally loosen what the company calls a “stranglehold” that the US and Europe have been imposing with respect to the manufacturing and supply of 12-inch silicon wafers.
The government of Jiuyan District has been providing Daqo with full-range support, resolving various issues with the coordination of local resources and the development of the projects. The local government is assisting the company in moving through the various administrative procedures and clearing out as much red tape as possible. In doing so, the building of the projects is expected to accelerate.
The government of Jiuyuan also said the project will provide the momentum for the formation of China’s first mega industry park that encompasses the entire industry chain for semiconductor products. More manufacturers for advanced PV products are expected to come to this region, thereby supporting polysilicon production, processing of electronics-grade polysilicon, PV glass production, PV module production, assembly of inverter systems, assembly of combiner boxes, etc.