Declining prices whether on the spot market or long-term supply agreements are making business conditions very tough for polysilicon producers, regardless of their market size or purity of the material they produce. According to the latest financial results of Dow Corning, its JV subsidiary, Hemlock Semiconductor expects overcapacity in the sector to continue throughout 2012.

As a result, the company said that Hemlock was aggressively seeking further cost reductions and yield improvements to better manage pricing pressures, which are therefore most likely to continue, despite spot market prices already below US$30/kg and heading towards US$20/kg. Only the largest producers have manufacturing costs below the US$20/kg mark.

“Protecting our competitive cost position at both Dow Corning and Hemlock Semiconductor remains essential to our long-term success, and we are aggressively pursuing opportunities to increase efficiency and reduce costs in our operations,” commented J. Donald Sheets, Dow Corning’s executive vice president and chief financial officer in a statement.