Tongwei signs US$7.6bn silicon supply agreement with wafer manufacturer Qinghai Gaojing Solar

By Carrie Xiao
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The new contract value has surpassed Tongwei’s total annual revenue for 2019 and 2020. Image: Tongwei

Tongwei has announced that its subsidiaries have signed a RMB50.9 billion (US$7.58 billion) silicon material sales contract for 216,100 tons with Qinghai Gaojing Solar Energy Technology Co., Ltd.

The announcement on 17 June said that from 2022 to 2026, Qinghai Gaojing will purchase no less than 216,100 tons of silicon from Tongwei’s subsidiaries. Ordering details will be negotiated monthly and the total amount of contract trading volume will be subject to the final transaction amount.

Based on the average transaction price of mono dense poly announced by Silicon Branch of China Non-ferrous Metals Industry Association on 15 June, the total sales volume is estimated to be more than RMB50.9 billion (US$7.58 billion).

Tongwei said the signing of the contract helps to maintain sales of its polysilicon products, which is in line with the company’s future business plan and has a positive impact on the company’s business performance.

The contract volume dwarfs Tongwei’s previous sales figures. In the past three years (2019-2021), Tongwei’s annual revenue was RMB37.555 billion (US$5.59 billion), RMB44.2 billion (US$6.58 billion) and RMB63.491 billion (US$9.45 billion), respectively. Meaning, the estimated contract amount of RMB50.9 billion (US$7.58 billion) has exceeded the company’s total revenue for both 2019 and 2020, and is close to its 2021 revenue figure.

GaoJing Solar is one of the fastest growing new players in the silicon wafer arena in the past two years. The company was co-founded by a senior technical team in the industry and Huafa Group, a leading state-owned company in Zhuhai, as well as IDG Capital, a well-known investment institution.

With capital support from all sides, Gaojing Solar Energy has rapidly expanded and reached full capacity in less than 3 years since its founding in 2020. The first and second phase of its 50GW silicon chip project has reached full capacity in June this year, ahead of the schedule, and it has become one of the top five players in the industry with a current capacity of 30GW.

Gaojing will also build 50GW of ingot pulling and 30GW of wafer slicing projects in Yibin, Sichuan province, with a total investment of RMB22 billion (US$3.28 billion). The construction will be executed in three phases.

This means Gaojing will catch up with LONGi and Zhonghuan, with a solar wafer capacity of 80GW in total as soon as the Yibin site is completed.

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