China’s market supervision body has warned of monopoly risks in the plans to consolidate the country’s polysilicon sector among industry leaders.
Reports say that a number of market leaders, including Tongwei, GCL Technologies, Daqo New Energy and Xinte, were called for a meeting with China’s State Administration for Market Regulation (SAMR) this week where they were warned not to pursue plans to coordinate on production capacity, sales volume and prices.
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Local media has reported that the SAMR voiced concerns that the plans would create a monopoly among a few leading players.
Over the last year there have been reports and rumours of plans to consolidate and cut production in the Chinese polysilicon industry following a period of serious oversupply and sustained low prices. Reuters reported in August that a consortium of firms led by Tongwei and GCL were planning to buy up and shut down one-third of the country’s polysilicon capacity in order to control prices and restructure the industry.
The Chinese government has also met with leading solar firms to discuss methods to curb oversupply and calm the competition that has pushed many firms to the brink financially.
In December, PV Tech’s Chinese correspondent reported that the polysilicon industry had created a new RMB3 billion (US$425 million) “industry platform,” with shareholdings from all of the leading polysilicon firms. Tongwei’s chairman, Liu Hanyuan, told Chinese media that the mechanism would regulate the “flow” of Chinese polysilicon and influence demand and price.
China has a stranglehold on global polysilicon production; nine of the top ten global producers are Chinese firms. However, on 18 December, the honorary chairman of the China PV Industry Association (CPIA) said that the polysilicon industry recorded its first decline in production since 2013.
Energy market analyst Wood Mackenzie has previously said that polysilicon production cuts and Chinese government policy changes would increase the price of downstream solar components, and polysilicon market analyst Bernreuter Research said that excessive production cuts to reduce inventory backlog could actually result in a polysilicon shortage by 2028.
Posting on LinkedIn yesterday, Johannes Bernreuter, head of Bernreuter Research, said that the price increases of polysilicon over the last few weeks were unsustainable. “Polysilicon manufacturers in China seem to believe they can turn market laws upside down: raising prices when demand is low and inventories are rising,” he wrote.
He added that “the price collusion among Chinese polysilicon manufacturers” has led to a “distorted market that does not incentivise the depletion of inventories, but rather their accumulation.” He said that price rises in polysilicon have not been reflected in solar module prices, arguing that this shows the change “cannot go on endlessly”.
Data from the CPIA showed that, as of November 2025, the average prices of polysilicon, wafers, cells and modules had risen by 38.9%, 2.2%, 0.4% and 2.3% respectively, year-to-date.
