The polysilicon industry is poised for a third wave of restructuring, eliminating a potential capacity of up to 2.4 million tonnes, as oversupply, driven by a surge in capacity in China, threatens the market. Bernreuter Research revealed this prediction in its Polysilicon Market Outlook 2027 report, citing the influx of capacity following the polysilicon shortage in 2021 and 2022, along with subsequent high spot prices.
Chinese market leader Tongwei plans to introduce 575,000 tonnes of new production capacity in 2024, exceeding expected market growth of up to 200,000 tonnes. Johannes Bernreuter, head of Bernreuter Research, emphasized that Tongwei's combination of low manufacturing costs and established product quality could potentially push most new entrants out of the market.
The report anticipates that, if all new capacities come online in 2024, oversupply could reach 1.4 million tonnes, prompting a shakeout. The polysilicon price is projected to dip below the record low of USD 6.75 (EUR 6.17) per kg seen in June 2020.
China's share in global polysilicon production is expected to rise to 90% in 2023. Notably, non-Chinese manufacturers Wacker, OCI, Hemlock Semiconductor, and REC Silicon may remain unaffected by the shakeout due to the Uyghur Forced Labor Prevention Act in the US, creating a higher-price market for non-Chinese producers.
Despite the shakeout, the solar industry is experiencing rapid growth, with Bernreuter forecasting an increase in annual photovoltaic installations from 425 GW in 2023 to 1,100 GW in 2027. However, this expansion is expected to drive strong demand for silicon metal, derived from quartz (SiO2), potentially leading to a shortage in quartz for silicon metal in the second half of the decade.
