Daqo Secures Big Silicon Deal With LONGi

LONGi Contracts Daqo New Energy To Supply 39,600 Tons Of Ultra-High-Quality Polysilicon Starting April 2018
07:13 AM (Beijing Time) - 04. April 2018
IMG_3929

As LONGi has major mono wafer capacity expansion plans toward 45 GW by 2020, it is currently securing the raw material needed to feed that new production facilities. It recently signed a silicon supply deal with Korea’s OCI and now with Daqo. (Photo Credit: TaiyangNews)

Key Takeaways

  • Chinese polysilicon producer Daqo New Energy has secured a long-term contract with China’s LONGi Green Energy to supply ultra-high-quality polysilicon
  • Starting from April 2018, the order of 39,600 MT of polysilicon will be supplied to LONGi until the end of 2020
  • LONGi will use this polysilicon to expand its production capacity of high-efficiency monocrystalline solar products
  • Daqo has received advance payment for the deal, but the exact financial details haven’t been revealed

Chinese polysilicon producer Daqo New Energy Corp. has signed a long-term supply deal with Xi’an based LONGi Green Energy Technology Co. Ltd., the world’s leading manufacturer of mono wafers. Daqo will deliver 39,600 MT of ultra-high-quality polysilicon between April 2018 and the end of 2020.

LONGi will use the polysilicon to expand its production capacity of high-efficiency monocrystalline solar products. Daqo has apparently secured an advance payment for this deal, though the companies have not revealed how much money has changed hands.

Daqo New Energy’s polysilicon meets the stringent purity requirements we have for the production of high-efficiency monocrystalline solar products,” said LONGi Chairman Baoshen Zhong. He added, “This supply agreement with Daqo New Energy will allow us to expand production capacity of our high-efficiency monocrystalline solar products to meet the growing demand from our downstream customers.”

In 2017, LONGi had a monocrystalline wafer capacity of 15 GW and 6.5 GW of monocrystalline module capacity. In January 2018, it announced to up wafer capacity to 45 GW by 2020 (see LONGi Plans 45 GW Mono Wafer Capacity By 2020). LONGi recently also signed a $1 billion 3-year polysilicon purchase deal with Korea’s OCI.

Roth Capital points out that the ‘LONGi’s commitment highlights Daqo’s ability to deliver the highest quality polysilicon to serve the ever growing mono mix, despite its industry leading cost structure.’ Indeed, it is interesting that LONGI, which needs very high quality silicon for its high-efficiency mono PERC technology, buys from Daqo, which is considered a global low-cost leader, with cash cost under $8/kg although its production capacity is still rather small compared to GCL and Wacker.

However, Roth Capital’s Philip Shen believes that Daqo could do well to look at more of these kinds of agreements with other customers in the future. “If additional agreements are signed and prepayments secured, we believe Daqo could move forward with another phase of capacity expansion beyond the current Phase 3B plan to reach nameplate capacity of 30k MT by H1’19,” said Shen.

Since the start of 2017, Daqo operates 18,000 tons of silicon production capacity (Phase 3A). It also manufactures wafers and guided for Q1/2018 to produce 15-20 million pieces.

 

 

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

Write, follow the author.
Email

Anu Bhambhani