Chinese polysilicon producer GCL-Poly Energy Holdings Limited has announced it is entering a joint venture with PV production equipment maker and mono-wafer company Wuxi Shangji Automation to develop and produce 300,000 MT granular silicon.
The joint venture will be owned by GCL-Poly and Wuxi Shangji under 65:35 shareholding, respectively, as per initial terms agreed upon by both the parties. GCL-Poly has entered the agreement with its FBR polysilicon arm Jiangsu Zhongneng Polysilicon Technology Development Co.
Under the strategic cooperation framework agreement signed, the project will be located in Inner Mongolia of China for an estimated investment of RMB 18 billion ($2.78 billion). It will be implemented in 3 phases, with 60,000 MT planned to come online under phase I with an investment of RMB 3.6 billion ($556 million).
The stock exchange filing in which GCL-Poly has made the revelation does not specify the timeline for this capacity to come online.
"The cooperation demonstrates good recognition of the quality and application of granular silicon by reputable downstream manufacturers of the industrial chain, facilitating the increase in market shares of granular silicon and is important to the marketing of granular silicon," explained GCL-Poly the rationale behind the decision to launch the joint venture.
It added that the 2 aim to fully leverage their respective strengths and resources to create mutual benefits and achieve a win-win situation as an equal priority. "Such positive engagement between the parties shall consolidate and improve their respective industry position in the photovoltaic industry," according to the statement.
Wuxi Shangji has been entering long term deals with polysilicon suppliers to secure smooth access to polysilicon for its wafer business. In September 2020, it signed up to receive 16,700 MT polysilicon from Jiangsu Zhongneng Silicon Technology Development and Xinjiang GCL New Energy Material Technology, after it had already contracted Daqo to supply the up to 32,000 MT (see China PV News Snippets: Shangji, Cybrid, DZS Solar).
It is an interesting to note that all recent capacity additions for polysilicon are to come up outside of Xinjiang—the stronghold of polysilicon supply chain globally—that's been in news for reported forced labor practices at polysilicon fabs. About half of today's global production is coming from Xinjiang province.
GCL-Poly recently increased its FBR based granular silicon production capacity to 10,000 MT annually in February 2021 bringing it online in Wutongqiao district of Sichuan province, and secured long term deals with LONGi Green Energy and Tianjin Zhonghuan Semiconductor (see GCL-Poly Cracks Polysilicon Deals With LONGi & TZS).
In February 2021, another polysilicon supplier Xinte Energy entered an investment framework agreement with Baotou City of China to build a high-purity polysilicon fab with 200,000 MT annual production capacity (see Xinte Energy To Build 200,000 Tons Polysilicon Fab).
Considering the GCL-Poly and Wuxi Shangji plans do come to fruition as announced, it should be a welcome news at a time the industry is facing short supply of several raw and processing materials for solar modules. According to a recent BloombergNEF report, polysilicon is likely to remain a bottleneck in the near term, but with new projects being announced, there should be adequate supply of glass and polysilicon as these fabs come online (see BloombergNEF Forecasts 160 GW New Solar PV Build In 2021).
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