The month of April brought many changes for the global polysilicon industry. According to EnergyTrend, a research division of TrendForce, the polysilicon industry is becoming increasingly polarized. With a competitive advantage in terms of capital, cost, and technology, top-tier makers continue to expand capacity while small and medium manufacturers are facing halted production, possibly even bankruptcy. TrendForce believes the polysilicon industry will grow more competitive by the day, illustrating the truth of the old adage “survival of the fittest”.
According to TrendForce, Canadian polysilicon and UMG (upgraded metallurgical) silicon manufacturer Timminco declared bankruptcy at the end of April, but German polysilicon giant Wacker Chemie AG has not been daunted by the weak market and continues with its capacity expansion plans. Wacker indicates, their new polysilicon facility in Nünchritz, Germany boasts a capacity of 15,000 metric tons and will begin mass production in Q2 – yearly capacity is expected to reach 52,000 metric tons by the end of 2012. Meanwhile, construction continues on the maker’s new Tennessee plant. The U.S. facility is expected to begin mass production in 2014, which will bring Wacker’s total polysilicon capacity to 70,000 metric tons. Wacker indicates, as clients are demanding higher polysilicon quality standards, the supplier’s capacity is almost completely under contract until the end of 2015. Small and medium polysilicon manufacturers, on the other hand, are focusing mainly on spot market business. As price fluctuates rapidly and makers have hit a bottleneck in terms of cost and technology, they continue to sustain heavy losses – if there is a break in suppliers’ flow of capital, bankruptcy will be inevitable.
Industry players indicate, the major polysilicon suppliers are currently focusing on contract sales, as it is more cost advantageous and reduces the risk from price fluctuations. The current contract price trend for first-tier makers falls in the US$25-30 range. TrendForce indicates this price range is optimal for small and medium manufacturers’ costs, but first-tier suppliers still have the flexibility to offer clients lower prices.