Bookmark and Share

Solar Grade Polysilicon game over as Era of super High Solar Raw Material Prices fade away

2 Comment


Polysilicon Companies have seen an amazing amount of profits in the period between 2008-2011 end as prices of polysilicon shot up to $400/kg which resulted in profit margins of greater than 90% which is superlative for what is an essentially a commodity. Polysilicon capacity has almost grown by 10x in the last 5-6 years as massive demand growth from solar panels made suppliers add capacity without thinking about future sustainability. OCI and GCL Poly which had no polysilicon capacity till 4-5 years ago added almost a hundred thousands tons of polysilicon capacity to become the top 2 producers in the world.

Other Solar Technologies that emerged as a result of high Polysilicon Price

The high prices of polysilicon resulted in the growth of a number of other solar technologies like solar grade polysilicon and thin film technology. The rise of these solar technologies was mainly due to their role in reducing or eliminating the use of polysilicon. Solar Grade Polysilicon was aimed at producing lower quality polysilicon at sharply lower prices than regular high grade polysilicon which was used by the semiconductor industry. Elkem Solar and Timminico were the principal companies involved in solar grade polysilicon (SOG).

However, with polysilicon prices crashing to $20 levels from around $80-100/kg levels a year ago, Timminco has already become bankrupt and now Elkem Solar is closing its factory once again after starting it a few months ago. With high grade polysilicon oversupplied in the market , there is little prospect that Elkem Solar will ever recall its 225 employees it is letting go “temporarily” .


Difficult market conditions and industry-wide overcapacity has led to Elkem Solar, based in Norway, to temporarily suspend production of its solar grade silicon (SoG) material. The company had only recently restarted production after idling operations in October last year. Elkem had recently said that it would reduce its ferrosilicon sales by as much as 15,000 tonnes due to FeSi prices falling below production costs. Elkem’s annual capacity of SoG material is 6,000MT.

“There is a large overcapacity in the solar sector and the market is in a phase of consolidation, adjusting production to demand,” stated Trond Sæterstad, senior vice president Elkem Solar. “The market for solar power will continue to grow in the future and Elkem Solar has a technology that provides us with a significant competitive advantage over other manufacturers. We will therefore be in a stronger position than our competitors when the market recovers.”

Higher-purity polysilicon prices have plummeted over recent years, with blended average spot prices just above US$20/kg, forcing lower-grade material prices to below manufacturing costs or close to cost levels. Many small polysilicon producers have halted production and or exited the sector.

Elkem Solar employed 225 workers who are negotiating with management over the extent of the temporary layoffs. The company did not comment on when production or market conditions would improve for production to be resumed.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

2 Responses so far | Have Your Say!