A new ranking of the top polysilicon manufacturers from German research firm Bernreuter Research shows that four of the world’s five largest producers are based in China. And although Germany-based Wacker Chemie, which also has a polysilicon plant in Tennessee, ranks second on the list for 2020, the company’s president has said there are no plans to increase production of solar-grade polysilicon. Bernreuter Research therefore predicts that the Top 4 polysilicon manufacturers will all be from China by 2022.
Why this matters: There is continued concern that forced labor is being used in China’s Xinjiang province, where already the vast majority of polysilicon — the absolute foundational building block of solar panels — is produced. The area is also prone to use coal-fired power plants for electricity. The global solar industry will be hard-pressed to avoid this relation.
The top 10 polysilicon manufacturers for 2020 include:
- Tongwei (China)
- Wacker (Germany/United States)
- Daqo New Energy (China)
- GCL-Poly (China)
- Xinte Energy (China)
- Xingjiang East Hope New Energy (China)
- OCI (South Korea/Malaysia)
- Asia Silicon (China)
- Hemlock (United States)
- Inner Mongolia Dongli Photovoltaic Electronics (China)
Seventh place OCI slid down the list after shutting down its solar-grade polysilicon operations in South Korea last year. Wacker, which had been No. 1 overall before dropping to second this year, is still the world’s largest manufacturer of electronic-grade polysilicon for the semiconductor industry. Compared to its rapidly expanding Chinese competitors, however, Wacker has no intention to increase its solar-grade capacity beyond continuous debottlenecking. “We are certainly not interested in building incredible, new capacities,” said CEO Rudolf Staudigl on a conference call about his company’s first-quarter results on April 30.
Consequently, Wacker will be overtaken by three more Chinese manufacturers and fall back to No. 5 in 2022, predicts Bernreuter Research.
“The rise of China-based players in our ranking is exemplary for the increasing dominance of the Chinese polysilicon industry,” said Johannes Bernreuter, head of Bernreuter Research and author of the Polysilicon Market Outlook 2024. “China’s share in the global solar-grade polysilicon output will approach 90% in the coming years.”
The three likely companies to surpass Wacker for the top four spots in 2022 – GCL-Poly, Daqo and Xinte Energy – are running factories with very low-cost electricity from coal-fired power plants in the Xinjiang Uyghur autonomous region in northwestern China. The area has come under scrutiny after reports surfaced on the widespread use of forced labor there.
“These reports should be a wake-up call for western governments. If their countries don’t want to become almost completely dependent on solar products from China for the transition to renewable energy, they have to implement an effective and long overdue industrial policy for a non-Chinese solar supply chain, in particular for ingot and wafer manufacturing,” commented Bernreuter. “Low-cost and renewable hydropower in the northwestern United States, Canada, Norway and Malaysia offers them the chance to fuel an alternative supply chain without forced labor and a high carbon footprint.”
In December 2020, advocacy group SEIA asked solar companies to sign a pledge against using forced labor in the solar supply chain. The group plans to develop a supply chain traceability protocol for materials used in solar modules to help companies track from where their products are coming.
“Unethical labor practices run against everything we stand for as an industry and are counter to our values,” said Abigail Ross Hopper, president and CEO of SEIA. “It’s on us to be vigilant and take steps to ensure the solar industry is free of forced labor practices. Dozens of companies have already stepped up to sign our pledge and we’re calling on the entire industry to join us.”