Daqo to supply 41,000MT of polysilicon to leading 210mm wafer producer TZS

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Major China-based polysilicon producer Daqo New Energy has signed a three-year high-purity polysilicon supply agreement with Zhonghuan Semiconductor (TZS), totalling 41,000MT.

Daqo will report 2020 financial results next week and is expected to confirm polysilicon production reached within the range of 76,700MT to 77,200MT last year, compared to its nameplate capacity of 70,000MT.

Although Daqo did not disclose the annual supply volumes to TZS, management had noted in their third quarter earnings conference call that any new supply contracts would have lower volume shipments in the first year with higher levels available in subsequent three or four year contracts, due to capacity constraints.

Daqo already has plans in place to expand polysilicon production at its major plant in Xinjiang by a further 35,000MT to 40,000MT at a cost of around RMB5.0 billion (US$773 million). Previously, Daqo has been able to expand capacity within 12 months at the Xinjiang plant.

Due to polysilicon supply constraints in China, major purchasers have moved quickly to secure large quantities of polysilicon through the next three years. New plant expansions to have started last year are limited, and even those would take around two years to build and ramp to volume production.

Daqo’s major supply deals include JA Solar, LONGi Green Energy Technology and Trina Solar, all major ‘Solar Module Super League’ (SMSL) members and integrated wafer producers.

No financial details were disclosed about the TZS deal.

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