Polysilicon supply and demand will slow and integration inevitable

The development of the polysilicon industry began in the 1950s. The early polysilicon products were mainly for the semiconductor market. Since the demand for polysilicon products in the semiconductor market was not large, ranging from 20,000 to 30,000 tons, the current polysilicon industry is booming. Benefit from the rise of the photovoltaic industry. At present, more than 85% of the global polysilicon products are used in the photovoltaic industry. Taking the world’s largest polysilicon company, Hemlock, as an example, the company’s production capacity reached 6,200 tons as early as last century, and it was mainly used for semiconductors. However, in its product structure, only 30% and 70% of its semiconductor grades are used today. The polysilicon products are mainly used in the photovoltaic industry. At present, the expansion of polysilicon companies is also mainly targeted at the photovoltaic industry.

Global polysilicon production increased by 52%

2010 was a year of explosive growth in the photovoltaic industry. System integrators overwhelmed in order to rush ahead with the installation of PV subsidy in Germany. As a result, demand in the global photovoltaic market increased significantly. In 2010, the installed market reached 17 GW, which is 7.2 GW more than in 2009. Increased by 136%. The polysilicon industry is also driven by the photovoltaic market, which is rising.

In terms of polysilicon production, polysilicon output reached 160,000 tons in 2010, an increase of 52% compared with 105,000 tons in 2009. Among them, Germany's Wacker Company ranks first in the world with a production volume of 30,500 tons, the United States Hemlock Company ranks second with a production output of approximately 25,000 tons, China’s GCL-Poly Group ranks third with a production capacity of 17,500 tons, and South Korea’s OCI Corporation has nearly 16,000. Ton of production capacity ranked fourth, Norway's REC company ranked 1st with a capacity of 13,000 tons. The output of these five companies accounts for about 60% of the world's total production. In 2010, among the top ten polysilicon companies in global production, China’s Poly Group’s GCL, LDK Solar, Luoyang’s Silicon, and Chongqing’s Dazhong are among them. The output of these 10 polysilicon companies also accounted for nearly 80% of the world's total polysilicon production.

In terms of polysilicon production capacity, the expansion of the top ten companies is also very fast. The expansion project “solar3” of the Hemlock Company is continuously put into production. Its 2010 production capacity has reached 36,000 tons, ranking first in the world; in 2010, Wacker, Germany With its "phase 8" production expansion of WACKER polysilicon production at the Burghausen production site (the second quarter of 2010 has reached an estimated annual production capacity of 10,000 tons), its total polysilicon production capacity has reached 32,000 tons. Listed second in the world; Korea's OCI's third plant was put into production in December 2010, with an additional 10,000 tons of capacity, bringing its total capacity to 27,000 tons. The polysilicon production capacity of China’s GCL-Poly has also reached 21,000 tons. The major polysilicon companies in the world have nearly 180,000 tons of production capacity in 2010.

In terms of polysilicon prices, in early 2010, polysilicon prices continued their downward trend in 2009 and continued to fall. The lowest prices fell to nearly US$45/kg from April to May 2010, but since then, the German government announced it since July 2010. From the 1st onwards, PV subsidy was lowered, and many system integrators rushed to install photovoltaic power plants before subsidies, which led to an increase in demand for polysilicon and continued rising prices. The spot price of polysilicon rose to nearly 120 US dollars/kg in October 2010. But then polysilicon prices began to gradually fall and gradually tend to flatten, currently about 80 US dollars / kg or so. However, with the increase in the scale of polysilicon production and advances in production technology, its production costs have continued to decline. Taking China's GCL-Poly as an example, its polysilicon price has dropped from US$48/kg in the first quarter of 2009 to the end of 2010. US$22.9/kg, it is reported that in the first quarter of 2011, its production cost has reached US$22/kg; South Korea’s OCI’s polysilicon production cost is also advancing to US$25/kg. From the polysilicon selling price and cost, it can be seen that the polysilicon companies have achieved outstanding results in 2010. Taking Chongqing Daquan, which is mainly engaged in polysilicon, as an example, its gross margin in 2010 reached 43.8%; GCL-Poly's gross profit margin was as high as 44.4%.

Supply and demand for stable prices tend to be rational Based on the bright development prospects of the photovoltaic industry and the high rate of investment in polysilicon in recent years, global polysilicon companies have expanded production. Since the polysilicon industry is a capital and technology-intensive industry, the investment cycle is about 2 years. Therefore, from the information disclosed by major companies in 2010, we can probably estimate the production capacity of polysilicon in 2012. In 2011, Wacker's production capacity in Germany will reach 42,000 tons, OCI in South Korea will reach 42,000 tons, and China Poly Group will reach 46,000 tons. The total capacity of major polysilicon companies in 2011 is expected to reach 250,000 tons, plus the release of other polysilicon companies' production capacity, and the global polysilicon production capacity will reach over 320,000 tons in 2011. By 2012, the global polysilicon production capacity could reach 400,000, with Hemlock’s new plant with a capacity of 15,000 tons in Tennessee, USA, and OCI’s new plant with a capacity of 20,000 tons in Kunshan. Ton. Here, the silicon consumption of silicon wafers is calculated at 6g/W (in 2010, China Yingli New Energy Co., Ltd. has achieved a silicon consumption of 5.8g/W. With the progress of ingot casting and cutting technology, the silicon consumption of silicon wafers This will be further reduced.) In 2011 and 2012, polysilicon material can support a battery capacity of 50GW and 63GW (the amount of polysilicon used in semiconductors has been deducted here).

Although the global polysilicon production capacity can be almost equal to the downstream solar cell production capacity, the global polysilicon production capacity is mainly concentrated in the hands of the top polysilicon companies. For example, in 2011, the world’s top four polysilicon production capacity will reach 181,000 tons, occupying the world’s Polysilicon production capacity is nearly 60%, and some polysilicon enterprises have successively extended to downstream silicon wafers, such as China's GCL-Poly, LDK Solar, and Norway's REC, plus the fact that polysilicon is mainly based on long-term orders, so it is put into the spot market. Polysilicon may be limited. In the short term, the “supporting silicon is king” situation may still continue for some time, but in the long run, the supply relationship between the upper and lower reaches will continue to ease, and prices will gradually become more rational.

Polysilicon is a capital and technology-intensive industry with a high technical threshold. From the history of the development of the polysilicon industry, large companies will dominate. In the last century, polysilicon products were mainly supplied during the semiconductor market. There were as many as dozens or even hundreds of polysilicon enterprises. However, with the competition of technology and capital, the polysilicon market gradually transitioned from the multi-military melee situation to the seven polysilicons. Enterprises dominate the world. Judging from the current production capacity and production costs of the major polysilicon companies, the polysilicon industry will be inevitably integrated. Only through the continuous investment of large companies in technology and production scale can they maintain their competitive advantages in the international market.