Polysilicon production costs, wafer factory utilisation rates weigh down Daqo Q4 performance

Facebook
Twitter
LinkedIn
Reddit
Email
High prices for silicon powder weighed on Daqo’s cost base in Q4 2021. Image: GTAT.

Daqo New Energy recorded a dent to its quarterly revenues and margin in Q4 2021 after production costs spiralled and sales fell against a slide in demand.

Reporting its Q4 and full year 2021 results today, Daqo noted that it produced around 23,600MT of polysilicon in the final quarter of the year but sold just 11,642MT, a fall of 45% on the 21,183MT the company sold in the previous quarter.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

And while average selling prices for polysilicon in the quarter rose by around 23% sequentially to US$33.91/kg, production costs rose at a far quicker rate, more than doubling to US$14.11/kg on the back of higher silicon powder costs.

Quarterly revenue fell to US$395.5 million, down nearly one-third (32.5%) on Q3’s quarterly record, while gross profit slipped to US$239.8 million, representative of a gross margin that fell by nearly 14 percentage points to 60.6%.

Daqo said it had witnessed reduced downstream demand during the reporting period, caused by usual end of year seasonality and downstream inventory adjustments caused by wafer providers lowering utilisation rates. During Q4 2022 polysilicon pricing spiked further to highs of RMB269/kg (US$42.6/kg), prompting further volatility throughout the solar PV value chain.

Longgen Zhang, chief executive at Daqo, said that after “extensive analysis” of supply and demand dynamics, the company considered the impact to be “temporary in nature” and that utilisation rates of wafer manufacturers will recover “once the solar value chain achieves a new balance”.

By January 2022, Daqo said it had already witnessed market orders pick up, with the company also able to cater for some demand from its Phase 4B expansion project which produced its first polysilicon in December 2021 and is expected to produce 9,500MT in the opening quarter of this year.

Despite the challenges faced in the closing quarter, Daqo still posted a more-than-quadrupling of gross profit for the year, rising to US$1.1 billion.

In its guidance, Daqo said it expected to produce 31,000 – 32,000MT of polysilicon in Q1 2022 and 120,000 – 125,000MT this year.

Earlier today Daqo also confirmed it is effectively sold out for this year after a spate of long-term deals.

Read Next

Premium
July 11, 2025
According to the latest pricing data from the Silicon Industry Branch, released on 9 July, the transaction price range for n-type dense polysilicon has oscillated between RMB34,000-38,000/ton (US$4,741-5,299/ton).
July 10, 2025
UbiQD has signed a supply agreement with First Solar to supply its fluorescent quantum dot technology for use in the latter’s PV panels.
July 9, 2025
Caelux has finished the first sale of its perovskite glass, which will be paired with a silicon module developed by a 'reputable manufacturer'.
July 8, 2025
German solar glass manufacturer Glasmanufaktur Brandenburg (GMB) has filed for insolvency after posting monthly losses of €900,000 this year.
July 7, 2025
The board of REC Silicon is running out of time on a buyout offer by Korean conglomerate Hanwha previously dismissed as "lowball".
July 1, 2025
The UK government has released this week (30 June) its Solar Roadmap, which sets out practical measures to meet the country’s solar PV targets.

Subscribe to Newsletter

Upcoming Events

Media Partners, Solar Media Events
September 2, 2025
Mexico City, Mexico
Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 22, 2025
Bilbao, Spain
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK