Growing demand for solar PV modules across the globe is prompting raw material manufacturers to plan production expansions to meet the demand. Tongwei too has announced it will build 200,000 metric ton (MT) annual polysilicon manufacturing capacity in a new facility to be located in China's Sichuan province.
In a statement released to the stock exchange, the polysilicon and solar cell producer said it has signed an investment agreement with the local administration of Leshan city to locate the new facility in Wutongqiao district where it will produce high-purity crystalline silicon. The RMB 14 billion factory will be realized in 2 phases of 100,000 MT each.
Under phase I, RMB 7 billion will be invested to bring online 100,000 MT capacity by the end of December 2022. Phase II of the project will follow basis market and PV industry development in the future.
Currently, Tongwei has a total annual output of 80,000 MT of high-purity polysilicon production capacity, with another 150,000 MT under construction. By the end of 2022, it should reach a total manufacturing capacity of 330,000 MT once phase I of the Leshan project comes online, and on completion of phase II, its total polysilicon production capacity will grow to 430,000 MT.
In February 2021, Tongwei entered into a strategic cooperation agreement with JinkoSolar to jointly invest in 45,000 MT polysilicon and 15 GW monocrystalline silicon wafer production capacity (see Tongwei To Launch Manufacturing JV With JinkoSolar). With Trina Solar, another joint venture agreement relates to producing 40,000 tons of polysilicon along with 15 GW each of ingots, wafer cutting and high efficiency crystalline silicon cell capacity (see Tongwei & Trina Solar Joint Venture For 210 Products).
While there is nothing that can be said with certainty, however one would think Chinese silicon makers who are growing in stature would be making a conscious decision to expand their capacities outside of Xinjiang, the hub of most of global silicon production, to diversify risk. In June 2021, the US government ordered an immediate ban on imports of a key solar panel material from Xinjiang accusing local silicon suppliers of forced labor and blackslisting MG silicon producer Hoshine Silicon Industry, along with polysilicon producers Xinjiang Daqo New Energy, Xinjiang East Hope Nonferrous Metals, and Xinjiang GCL New Energy Material (see US Government Ban On Xinjiang Produced Solar Products).
According to another announcement by Tongwei to share its preliminary financial results for H1/2021, Tongwei expects to report net profit of RMB 1.79 billion to RMB 19.9 billion, reflecting an annual increase of 177% to 197%, thanks to high demand and tight supply of polysilicon. Its solar cell business has also been increasing its profitability.