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Global Distribution of Polysilicon Manufacturing

published: 2024-04-07 17:21

In recent years, the polysilicon industry has witnessed rapid development. By the end of 2023, global effective polysilicon production capacity reached approximately 225.6 million tons, representing a year-on-year increase of 71.6%. China's polysilicon production capacity surged from 116.3 million tons at the end of 2022 to 210 million tons, accounting for about 93% of global capacity, making it the world's largest polysilicon producer. China's share of global polysilicon production is expected to further increase in the future. Overseas polysilicon production is primarily concentrated in Germany, the United States, and Malaysia. However, due to electricity restrictions and high electricity costs in Europe and North America, the growth of overseas polysilicon production capacity has been relatively slow.

China dominates the global polysilicon market, with overseas production lagging behind

In recent years, the polysilicon industry has developed rapidly. By the end of 2023, the global effective capacity for polysilicon reached approximately 2.256 million tons, a year-on-year increase of 71.6%. China's polysilicon capacity increased from 1.163 million tons at the end of 2022 to 2.1 million tons, accounting for about 93% of the global capacity, making it the world's largest producer of polysilicon. The main overseas producers of polysilicon are Germany, the United States, and Malaysia, with annual capacities in the United States, South Korea, and Germany maintaining at 34,000 tons, 5,000 tons, and 65,000 tons respectively. Malaysia's Tokuyama capacity increased by 4,000 tons to 34,000 tons compared to 2022. In terms of output, the global production of polysilicon in 2023 was about 1.6 million tons, with China's production accounting for more than 80%, ranking first globally for fourteen consecutive years and exceeding 50% of the global share for eight consecutive years. It is evident that China occupies a dominant position in the global supply of polysilicon. This is primarily due to Chinese polysilicon manufacturers having significant advantages in raw materials, electricity, and labor costs, along with continuous improvements in the quality of Chinese polysilicon products. Additionally, there is a substantial demand for polysilicon generated by downstream silicon wafer manufacturing in China.

The supply of polysilicon from overseas is contributed by Germany, Malaysia, the United States, Japan, and South Korea. In 2020, South Korea's OCI shut down its solar-grade polysilicon capacity in the domestic market due to high electricity prices, retaining only electronic-grade polysilicon capacity, leading to a sharp decline in South Korean capacity. By 2023, the main overseas capacities were in Germany, the United States, and Malaysia, collectively accounting for 85% of the total foreign capacity. Germany's polysilicon capacity mainly comes from the chemical giant Wacker, producing both solar-grade and electronic-grade polysilicon, while Malaysia's capacity is primarily from the overseas factories of the South Korean silicon wafer company OCI, focusing on solar-grade polysilicon. The United States' polysilicon capacity includes Wacker's overseas factories, Hemlock, and REC, covering both solar-grade and electronic-grade polysilicon. However, due to power restriction policies and high electricity costs in Europe and America, the growth rate of overseas polysilicon capacity is relatively slow.

The global polysilicon industry is gradually shifting towards China

By comparing the top ten global polysilicon producers in 2010, 2021, and 2022, it can be seen that the number of Chinese companies has risen from 4 to 8, and their share of production capacity has been further increased. By the end of 2023, the number of operational polysilicon manufacturers worldwide had increased to 25, including 16 in China and about 9 overseas. Looking at the production capacities of various companies in 2023, the number of companies with an annual production exceeding 10,000 tons increased from 16 in 2022 to 20. Ranked by production capacity, the world's top five polysilicon producers are all based in China, namely Yongxiang Co., Ltd., GCL-Poly Technology, Xinte Energy, Daqo New Energy, and Asia Silicon Industry. Of course, with the rapid development of the global solar energy industry and semiconductor industry, polysilicon producers in other countries and regions are also continuously increasing their production capacities. The future competitive landscape may undergo changes.

Domestic enterprises are mostly concentrated in Inner Mongolia and Sichuan

Chinese polysilicon enterprises are mostly located in regions such as Xinjiang, Inner Mongolia, and Sichuan. According to statistics, in 2022, the production capacity of these three provinces accounted for about 73%. Among them, the polysilicon production capacity in the Xinjiang region accounts for approximately 44%, making it the largest polysilicon producing region in China, mainly due to significant cost advantages in polysilicon production there, especially the low cost of electricity consumption nationwide. Meanwhile, with policy encouragement for the development of the entire photovoltaic industry chain in the Inner Mongolia region, coupled with the concentration of upstream industrial silicon and downstream silicon wafer capacities in the area, and low electricity prices, numerous companies have also invested in factories in Inner Mongolia. In 2022, the polysilicon production capacity in the Inner Mongolia region reached 14%. Considering the large scale of capacity expansion and rapid growth rate in the region, it is expected that the future capacity share will further increase. The Sichuan region's capacity share is about 15%. Due to stricter control over new polysilicon production capacity indicators locally, and higher electricity costs during the dry season when hydropower is the main source, the stability of electricity costs is not as good as in Xinjiang and Inner Mongolia, so it is expected that the future production capacity growth rate will not match that of Xinjiang and Inner Mongolia.

Since the main downstream products of polysilicon, photovoltaic cells, and modules are concentrated in China, which has a high demand for polysilicon, China primarily relies on imports. According to customs data, China imported 88,000 tons of polysilicon in 2022, and 62,900 tons in 2023, a year-on-year decrease of 28.46%, mainly from Germany, Malaysia, Japan, and Taiwan, among other regions. As new polysilicon capacities in China are successively put into operation and utilized, the self-sufficiency rate of polysilicon has increased, leading to a decline in import volumes.

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