Author: Tian Si

Edited by Jiang Bo

The announcement of the silicon material leader caused a huge earthquake in the photovoltaic industry!

Huaxia Energy Network (public number hxny3060) noted that recently, Tongwei Co., Ltd. (SH: 600438) announced that it plans to add a 10,000 tons/year granular silicon pilot line in the "Yongxiang New Energy Phase II Technical Transformation Project", and eventually form a polysilicon production capacity of 101,000 tons.

Yongxiang New Energy is a company owned by Tongwei, whose polysilicon subsidiary, Sichuan Yongxiang Co., Ltd., holds 85% of the shares, and LONGi Green Energy (SH:601012) holds a 15% stake.

After the announcement was issued, the industry was in an uproar, and it was rumored that Tongwei had turned to the layout of granular silicon.

However, Tongwei quickly refuted the rumors, and the company replied to media inquiries, saying: "The granular silicon project is a research and development project that enhances the competitive advantage of rod silicon, and the core process, key parameters and quality control system have formed an independent technical path, which is substantially different from other technical solutions in the industry." ”

The

reason why the rumor of "Tongwei's layout of granular silicon" can cause a huge shock in the industry is essentially that the low-cost advantage of granular silicon is too lethal to the polysilicon industry. With the increase in the market share of granular silicon, the entire polysilicon industry is ushering in great changes.

How to produce more cost-effective polysilicon through technological innovation has become a "rush to answer" question for polysilicon companies, and if they answer incorrectly or do not answer the question, they will be thrown out of the game.

Prices are sluggish, putting pressure on polysilicon companies

In the shadow of overcapacity, the PV industry is engaged in a fierce price war.

Polysilicon has fallen below the cost line since May last year. In addition to the re-feeding material rebounded to 41,700 yuan/ton, the average transaction price of other transactions is still hovering below 40,000 yuan/ton. This price is basically unprofitable or even loss-making for most polysilicon companies.

According to brokerage data, in August 2024, Tongwei's polysilicon cash cost has dropped to 35 yuan/kg, which is already the best cost control representative among rod silicon companies. For other similar companies, in the third quarter of 2024, Daqo Energy (SH:688303) cash cost fell to 38.93 yuan/kg, while Xinte Energy (HK:01799)'s polysilicon production cost in the first half of the year was still 48 yuan/kg.

The sluggish polysilicon price is still friendly to granular silicon companies, and there are still good profit margins. In the fourth quarter of 2024, GCL Technology's (HK:03800) cash cost of granular silicon further decreased to 28.17 yuan/kg. If the price is purely in theory, the market impact of granular silicon will be very strong.

In addition, the low-carbon emission advantages of granular silicon are also very obvious. In September last year, the carbon emissions per kilogram of granular silicon at GCL Technology's Leshan base reached 24.913kg of carbon dioxide equivalent, while the rod-shaped silicon was about 58kg, nearly twice as high as the former.

Rod silicon and granular silicon are the two main technical routes of polysilicon. The former adopts the modified Siemens method, which is the mainstream technology adopted by the vast majority of enterprises in the industry; The latter uses the fluidized bed method, which is only used by a few companies such as GCL Technology, Shaanxi Tianhong Ruike and Xingyang Technology.

As a leading polysilicon company, Tongwei has a "wind vane" status in the industry. If Tongwei also joins the granular silicon camp, it means that the market share of granular silicon will be further expanded, which may mean catastrophic consequences for other polysilicon companies, especially those such as Daqo Energy and Hesheng Silicon (SH: 603260), which have expanded their polysilicon production capacity on a large scale in recent years.

From 2022 to 2023, Daqo Energy has announced more than 300,000 tons of polysilicon and supporting industrial silicon, round silicon cores and other projects in Inner Mongolia and Xinjiang, with a total investment of 32.7 billion yuan; At the same time, Halcyon also announced its expansion plan of 400,000 tons of high-purity polysilicon, with a total investment of more than 35.1 billion yuan.

The huge cost of tens of billions of capacity expansion has not yet been recovered, and it will face a large-scale loss of the market, and the result will be catastrophic. As a result, a number of polysilicon companies may collapse, and the landscape of the entire polysilicon industry will change.

Each has its own strengths, and dual technologies may coexist for a long time

In its reply to the media, Tongwei emphasized that the granular silicon project is a supporting R&D project to enhance the competitive advantage of rod silicon. "For the sake of intellectual property protection and trade secrets, the specific information will not be disclosed to the public for the time being." This reply also made many polysilicon companies breathe a sigh of relief.

So, will the future market pattern change due to the entry of enterprises into granular silicon?

In fact, in order for polysilicon companies to enter the granular silicon market, they must at least break through many difficulties such as market, technology, patent barriers, and old production capacity, which is not something that anyone can do if they want to.

Although granular silicon has a cost advantage, it has a disadvantage in quality. There is a comparison of the performance parameters of the products of the two companies on the Internet: in terms of the concentration of donor impurities, the concentration of acceptor impurities and the concentration of carbon, granular silicon is 11.76 times, 5.88 times and 10.71 times that of the comparison object respectively.

In addition, the production of granular silicon is limited by patent barriers. According to industry insiders, the fluidized bed method is divided into two technical routes, one is GCL's technology and the other is Norway's REC technology. However, no matter which route, the core technology has been applied for patent or intellectual property protection. The layout of granular silicon by new enterprises may touch the red line of relevant intellectual property rights, and it is difficult to achieve patent breakthroughs without years of layout and huge capital investment.

What's more, polysilicon companies have huge rod silicon production capacity, and a large number of new projects are under construction. If we switch to granular silicon halfway, where will such a huge capacity investment go?

All of the above factors need to be weighed by all polysilicon companies, and they are the obstacles that stand in the way of rod silicon companies. It is not difficult to understand what Tongwei said, "The layout of this technology is to further consolidate the competitive barriers of photovoltaic upstream materials, optimize the cost structure through process complementarity, and provide customers with higher value product portfolios in the industrial chain." ”

In fact, from a market perspective, the excellent quality of rod silicon is exactly what differentiates it from the low cost of granular silicon. Rod silicon is suitable for high-purity markets, while granular silicon focuses on low-end or cost-reducing scenarios to meet different market needs. For a long time to come, the polysilicon industry is likely to maintain the coexistence of rod silicon and granular silicon.

Looking back on the development process of the photovoltaic industry, you can sing about various technologies, but cost reduction has always been the main theme. Cost reduction will never stop, technology changes will never stop, and there are more new stories to write about the battle in the polysilicon market.