Caught with dramatically lower demand for semiconductor silicon wafers and a below seasonal demand for solar wafers, MEMC is to review its capital spending and polysilicon capacity expansion plans, executives said in response to questions from financial analysts in a quarterly conference call. MEMC had previously announced plans to boost polysilicon production from the current 8,000MT per annum, reached at the end of 2008 to 15,000MT in 2010.
Although the company has US$1.3 billion in cash, it has not been as aggressive as other major polysilicon producers in adding capacity and has been losing market share in recent years, according to market analysts.
Although executives would not be drawn on giving specifics, MEMC has experienced pricing pressure and acknowledged that recent job cuts were intended to better balance operational costs with future expected wafer demand.
MEMC has also had to renegotiate solar wafer prices with several major customers in light of the rapidly increasing global supply of polysilicon and the huge declines in spot market prices, even though long-term wafer contracts are well below spot price comparisons.
The wafer producer also acknowledged that it would review its current outsourcing strategy for solar wafer production, which could be brought in-house via possible acquisition of some or all of its current suppliers.
