Zhonghuan Semiconductor, a Chinese supplier of polysilicon and wafers, issued a formal notice on May 23 to explain the extent of the impact that the recent earthquakes in the Chinese provinces of Yunnan and Qinghai have on its operations. According to the notice, the 6.1-magnitude quake that struck Yunnan on May 21 did not affect its production facilities located in the province. However, the larger 7.4-magnitude quake that hit Qinghai on May 22 caused disruptions at its major production base located in the neighboring Inner Mongolia Autonomous Region. Specifically, the shaking caused a temporary malfunctioning of some furnaces and crucibles that are used to manufacture mono-Si products. Following the inspection of the production lines in the base, the company determined that the Qinghai quake affected around 0.13GW of output from the base for the month of May. The company also reported that it already initiated an emergency response plan that will lead to a gradual recovery of production capacity.
The polysilicon market has been experiencing rising prices and undersupply this year. Lately, the shortage has actually become more acute than previously anticipated, so suppliers have kept their quotes high. Among the 11 Chinese polysilicon suppliers, three are currently doing maintenance work on their production facilities. This situation, together with the recent quakes, are expected to have further constrained China’s polysilicon output in May to some extent. Likewise, the QoQ growth in the total polysilicon output in 2Q21 will probably be lower than originally projected. Even though the polysilicon market is now entering its traditional off-season, prices and demand are likely going to maintain strong upward momentum.