Overcapacity in the Chinese polysilicon market pushed profits down for German polysilicon manufacturer Wacker last year.
In its preliminary Q4 and full-year 2024 financial results, Wacker expects its polysilicon earnings to contract by 39% compared with 2023 to US$195 million. Its total sales over 2024 reached US$950 million, a 41% contraction compared with US$1.6 billion in 2023.
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The company blamed this slump on low prices and demand in the polysilicon sector. “The economic environment in 2024 was challenging,” CEO Christian Hartel said: “Our business was hit by the slump in demand for solar-grade polysilicon and by the sustained excess capacity in China”.
Hartal also cited the “debate surrounding US anti-dumping tariffs on solar imports from some Southeast Asian countries” which he said “unsettled the markets”. Wacker also said that high energy prices in Germany – where it has two polysilicon production facilities – had a negative impact on its polysilicon business.
The price of Chinese polysilicon has been consistently low since it fell sharply in early 2023. This has been exacerbated by the high production volumes from major players, which has resulted in oversupply and shrunken demand.
Major Chinese producer Daqo New Energy confirmed that it had been selling polysilicon below production cost in Q2 2024 and subsequently announced cuts to its production volumes in Q3 in response to sustained financial losses.
The same dynamics have affected the other companies at the top of the Chinese polysilicon market.
Given these dynamics, demand for Wacker’s polysilicon from the major solar manufacturers in China and Southeast Asia has dwindled; as well as polysilicon production, China and Chinese companies overwhelmingly dominate global production of solar wafers and ingots.
In its preliminary results announcement, Wacker said it had increased its share of production of “hyperpure” polysilicon for the semiconductor industry. The company is known for its high-purity product; high quality solar-grade polysilicon is often required for high-efficiency n-type solar cells, particularly the tunnel oxide passivated contact (TOPCon) technology which has come to dominate production capacity at the major Chinese manufacturers.
