Chinese polysilicon supplier Daqo New Energy announced on January 3 that it will inject RMB 9.999 billion into its wholly owned subsidiary Inner Mongolia Daqo New Energy. The capital injection is for the development of the first phase of its latest greenfield project located in Baotou, a prefecture-level city in China’s Inner Mongolia Autonomous Region. The first phase will have an annual production capacity of 100,000MT for high-purity polysilicon and 1,000MT for semiconductor-grade polysilicon. The capital injection will proceed in accordance with the future progress made in the development of the project. This story was first reported by local Chinese news outlets and other renewable energy websites.
With the capital injection, the registered capital of the subsidiary will grow massively from just RMB 1 million to RMB 10 billion.
Daqo wants to accelerate the construction of its manufacturing facilities in Baotou in order to significantly raise its production capacity for high-purity polysilicon and capture more market share. The other contributions that these new facilities will make to Daqo’s operations include the structural optimization of the core businesses, the diversification of product offerings, the strengthening of profitability, and the enhancement of the overall competitiveness.
Just earlier on December 20 last year, Daqo issued a press release stating that its subsidiary Xinjiang Daqo New Energy had entered into a strategic cooperation framework agreement with the municipal government of Baotou for the development of local production capacity for polysilicon, silicon metal, and silicone. The agreement was officially signed on December 18 and then approved by the board of Daqo on December 31.
Under the agreement, Daqo will set up an annual production capacity of 300,000MT for high-purity industrial silicon, 200,000MT for silicone, 200,000MT for high-purity polysilicon, and 21,000MT for semiconductor-grade polysilicon. The development of the aforementioned first phase will commence in the first quarter of this year and finish in the second quarter of 2023. The press release that was issued on December 20 said that the first phase will entail an estimated investment of RMB 8.55 billion. As for the next phase, its schedule is to be determined depending on market conditions. To support Daqo’s efforts, the municipal government of Baotou will be offerings various incentives including a lower electricity rate for its facilities.
Despite the tensions between China and the US, Daqo is proceeding with its capacity expansions and aims to reach 270,000MT per year for polysilicon by 2024.