Daqo’s 200,000 MT Polysilicon For Solar Industry

• Daqo New Energy has announced to expand its polysilicon production capacity for solar with another 200,000 MT in Baotou, China
• Xinjiang Daqo wants to add this capacity, along with 21,000 MT polysilicon for semiconductor industry
• Under phase I, first it plans to build 100,000 MT capacity for solar, which is scheduled to enter construction in Q1/2022
• Decision on phase II and its timeline will be taken basis market conditions

Chinese polysilicon producer Daqo New Energy has announced its plans to expand its polysilicon production capacity in China's Baotou city of Inner Mongolia province. Its subsidiary Xinjiang Daqo has entered into a strategic cooperation agreement with the local government.

Under the strategic cooperation agreement, Xinjiang Daqo plans to build polysilicon manufacturing projects for the solar industry with a combined annual capacity of 200,000 MT, polysilicon facilities for the semiconductor industry with 21,000 MT annual capacity, another 300,000 MT silicon metal production projects, and 200,000 MT for silicone projects.

Polysilicon projects will be located in Jiuyuan district of Baotou city, while metal silicon and silicone projects will be stationed in Guyang county.

It will add this capacity in 2 phases with the 1^st phase of 100,000 MT of polysilicon for the solar industry, and another 1,000 MT for semiconductor industry entering construction in Q1/2022 with completion scheduled for Q2/2023. This capacity is expected to cost an investment of RMB 8.55 billion.

Decision on phase II and its timeline will be determined later according to market conditions.

"Our polysilicon plants in Baotou City are expected to partially use renewable energy to produce polysilicon and gradually realize 'renewable for solar' in the near future," said Daqo New Energy's CEO Longgen Zhang.

Xinjiang Daqo will get favorable electricity rate and will be granted the highest priority for the use of green energy within Baotou, including direct supply of green energy to the new projects.

Recently, the company expanded its capacity with the addition of 35,000 MT polysilicon production line in Xinjiang region of China (see China PV News Snippets).

While Daqo did not share its reasons for choosing Inner Mongolia to add new capacity, one can imagine it would be helpful for the company to safely target international markets, especially the US, from the new location as anti-Xinjiang trade sentiment gains momentum.

The US House of Representatives passed the Uyghur Forced Labor Prevention Act earlier this month to prevent goods manufactured or produced in Xinjiang from entering the country for alleged human rights violations (see US Forced Labor Prevention Act).

Recently, the US Senate has also passed the bill which now needs to be signed by US President Joe Biden to become an act which could have major ramifications for the US solar industry as a major chunk of polysilicon used for solar modules globally, comes from Xinjiang.