Dow Corning’s JV polysilicon subsidiary, Hemlock Semiconductor was impacted by overcapacity in 2011. Like major competitor, Wacker sales were lower and demand weakened. Overall, Dow Corning recorded record sales of US$6.43 billion in 2011 while adjusted net income decreased 15% compared to 2010. The company does not breakout polysilicon sales.
“We were unable to translate record 2011 sales into increased profits due to oversupply and softening demand in our industry combined with higher materials and energy costs,” commented Executive Vice President and Chief Financial Officer J. Donald Sheets.”This situation, as well as continued global economic volatility, impacted both our silicones and polycrystalline silicon-segments.”
Sheets added in a statement that; “Our polycrystalline silicon business through Hemlock Semiconductor Group was impacted by significant oversupply in the solar industry, a condition we expect to continue in 2012.”
The comments support resent analysis by GTM Research that overcapacity will continue, putting continued pressure on polysilicon spot pricing and long-term supply contract pricing.
Dow Corning reported fourth quarter sales were US$1.52 billion, 4% lower than last year’s fourth quarter. The company noted that prices softened across most geographic regions.
Net income was US$260 million, 3% higher than last year’s fourth quarter, but adjusted net income was US$76.8 million, 53% lower than last year’s fourth quarter.
Sheets also noted that as a cost-competitive polysilicon manufacturer the company was in a good position to compete in the future, while emphasising it was “aggressively pursuing opportunities to increase efficiency and reduce costs in our operations.”