Silicon Joint Venture In Malaysia

Japan’s Tokuyama Joins Hands With South Korea’s OCI For 10,000 MT Semi-Silicon Production Fab
OCI’s Samalaju polysilicon fab was once operated by Tokuyama and acquired by the former. Now both companies are planning a JV in the Malaysian market. (Photo Credit: OCIM Sdn Bhd)
OCI’s Samalaju polysilicon fab was once operated by Tokuyama and acquired by the former. Now both companies are planning a JV in the Malaysian market. (Photo Credit: OCIM Sdn Bhd)
  • Tokuyama and OCI have signed a MoU to explore the possibility of setting up a polysilicon JV
  • They plan to have one with an annual production capacity of around 10,000 MT in Malaysia
  • Tokuyama says the decision is taken looking at the expansion in the semiconductor market and subsequent forecast increase in demand for polycrystalline silicon

Japanese chemicals producer Tokuyama has joined hands with South Korean polysilicon producer OCI to explore the opportunity to develop a semiconductor-grade polycrystalline silicon manufacturing fab with around 10,000 MT annual production capacity in Malaysia.

The memorandum of understanding (MoU) was signed recently under which the duo plans to establish a joint venture (JV) company to produce semi-processed product of the silicon. Both the companies are going to individually conduct final process and sales.

The move comes at a time that solar silicon prices tank as gigantic manufacturing capacities are coming online in China. Solar silicon prices have decreased by nearly 50% since the start of the year. The semiconductor industry requires high-purity silicon than the solar industry. Prices and margins are much higher, while the market and competition is smaller.

Tokuyama says the collaboration is aligned with the company's Medium-Term Management Plan 2025 that guides its efforts to transform its business portfolio to focus on electronics, healthcare, and environmental businesses and pursue international expansion. It factors in the 'expansion in the semiconductor market and subsequent forecast increase in demand for polycrystalline silicon' for this move.

Interestingly, in 2017 OCI acquired a 100% stake in Tokuyama's Malaysian polysilicon production fab that had an annual capacity of 20,000 MT in Samalaju Industrial Park by buying the latter's subsidiary Tokuyama Malaysia Sdn Bhd. It is powered by hydropower and located in a tariff-free site, according to OCI's website.

OCI also operates a 52,000 MT plant in South Korea's Gun-san which increases its total annual production capacity up to more than 72,000 ton. It produced 41,500 MT in 2022 according to Bernreuter Research (see Chinese Grip On Global Polysilicon Supply Firm).

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