Leading polysilicon and wafer manufacturer from China GCL Technology Holdings Limited had a profitable year in 2023, even though it declined by over 84% thanks to the drop in average selling price (ASP) of polysilicon. The price during the year averaged around RMB 76.8 ($10.9)/kg.
The company had previously issued a net profit forecast, expecting an annual drop of 84% to 86% to RMB 2.3 billion to RMB 2.6 billion for the year (see China Solar PV News Snippets).
The group's annual revenues dropped by 6.2% to approximately RMB 33.7 billion ($4.68 billion). It attributes the decrease mainly to the combined effect of the decrease in ASP of solar material products during the year and an increase in sales volume of granular silicon products due to the continuous release of granular silicon production capacity in Leshan and Baotou bases.
Revenue from external customers of solar materials amounted to approximately RMB 33.48 billion ($4.65 billion).
Adjusted EBITDA was declined almost 40% annually to RMB 12.66 billion ($1.76 billion). The group's gross profit margin for the year declined from 48.7% in 2022 to 34.7% in 2023. For the solar material business, the gross profit margin decreased from 48.7% to 34.6% over the same period. As for the solar farm business, the drop was from 52.7% to 46.7%.
"The gross profit of polysilicon was greatly affected by market fluctuations and other factors," explained GCL Technology Chairman Zhu Gongshan. "In 2023, the average production cost of granular silicon decreased by 27% as compared with that at the end of last year, which was the leading level in the industry, and still maintained a downward trend. The average production cost of granular silicon in the fourth quarter at the Xinyuan base was already as low as RMB 35.9 ($5.0)/kilogram."
The management believes the cost will continue to drop as the production of granular silicon will make breakthroughs constantly and the technology will continuously optimize, coupled with growing synergy created with its upstream materials.
Last year, GCL completely switched over to the silane fluidized bed reactor (FBR) granular silicon production technology, having withdrawn from silicon ingots using the Siemens method. This, it says, helped it improve average production costs and increase product sales volumes (see China Solar PV News Snippets).
GCL's shipments were up during the year as it sold 226,123 metric tons (MT) of polysilicon, including 18,450 MT of internal sales, representing a 141% annual increase. Wafer shipments improved 12% annually to 51,891 MW, including 23,224 MW OEM wafer.
Sales volume of granular silicon to the top 5 customers totaled 64,401 MT, 36,588 MT, 16,949 MT, 15,462 MT and 13,680 MT, respectively, accounting for 76% of the total sales volume of granular silicon.
Its 4 major granular silicon production bases in Jiangsu, Inner Mongolia and Sichuan achieved full production capacity of 420,000 tons, which it says helped save 18.6 billion kWh of electricity annually compared to the Siemens method. The annual production cost dropped by 27% with single-module capacity increasing from 20,000 tons to 60,000 tons.
"The focus was on elevating total metal impurities to meet the 18-element quality control requirement, with product quality reaching semiconductor-grade standards. Over 90% of GCL's granular silicon 901A products can be applied to N-type applications. The top enterprises achieved 100% coverage," it added.
By the end of 2024, its granular silicon production capacity is targeted to increase to 500,000 tons while that of its globally largest-scale silane production capacity will increase from 500,000 tons to 600,000 tons/annum.
The company says it will fully upgrade its existing granular silicon production bases to near-zero carbon technology parks and digital parks by the end of 2025, to become carbon-neutral demonstration parks.
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