Polysilicon: Significant Release of Production capacity; New Entrants put into production one after another
In 2021 and 2022, the price of polysilicon has been on a steep rise due to a shortage in supply. This surge in price has attracted both established enterprises and new players, who are eager to capitalize on the promising future of the PV market and reap immediate profits from polysilicon. After analyzing the capacity plans of major polysilicon companies, it is projected that the planned capacity of polysilicon will surpass 2.7 million tons in 2023 and reach 4.1 million tons in 2024. According to data from the Silicon Association, the domestic polysilicon production capacity is expected to reach 1.187 million tons per year by 2022. If the production capacity increases by approximately 1.04 million tons per year in 2023, the total production capacity expected to be operational by the end of that year will be approximately 2.227 million tons. As per the annual report of the China Photovoltaic Industry Association, by the conclusion of 2023, the total domestic polysilicon production capacity may exceed 2.3 million tons per year. Overall, these developments indicate that the supply of polysilicon will be plentiful enough to meet the installed demand of more than 450 GW of PV in 2023, surpassing the global installed demand of approximately 355 GW.
Wafer: There is huge gap in profitability among different wafer companies, driven by factors such as cost, technology, and material supply.
Thinner, larger size, and N-type wafers serve as the emerging trends in technology. Thinner wafers offer advantages in reducing silicon consumption, and there is an ongoing effort among companies to further decrease their thickness. In 2022, the average thickness of P-type wafers was approximately 155μm, while TOPCon enterprises achieved around 130μm for N-type wafers, and HJT enterprises reached 110-120μm for their N-type wafers. These companies will continue to prioritize thinning wafers to drive cost reductions. Large size wafers are expected to dominate the future market. In 2022, the combined market share of 182mm and 210mm wafers accounted for 82.8% of the total, indicating a growing preference for larger sizes. This trend is expected to continue in the coming years.
The market share of N-type wafers is also steadily improving, reaching 10% in 2022, and it is projected to exceed 25% in 2023. This growth reflects the increasing adoption of N-type wafers in the industry. However, challenges arise due to the tight supply of high-purity quartz sand since 2023. Raw materials for mono crucibles, such as high-purity quartz sand, are predominantly imported from suppliers like Sibeleco, TQC, and India. The scarcity of raw materials and high technical barriers contribute to the tight supply. Consequently, the price of quartz sand remains high, creating a gap in cost, quality control, and profitability among wafer enterprises. Only a few companies can maintain a stable supply of raw materials, while others face difficulties in scaling up production capacity, maintaining quality standards, and controlling costs.