GCL acquires SunEdison’s Poly Assets

Polysilicon and wafer giant GCL Poly has made an extremely smart move by buying up SunEdison’s polysilicon assets and its poly and wafer technology for a bargain price of just $150 million. GCL is already the planet’s largest producer of polysilicon and wafers with a more than 30% global marketshare. It produces both at industry low costs and has exteneded its footprint into the downstream sectors of making cells, modules as well as project development.

This acquition of SunEdison’s assets will make it even more dominant in the upstream sector. It can also utilize SunEdison’s technology to further lower its cost base and improve its manufacturing process. SunEdison was one of the first companies to enter into polysilicon production and is an expert manufacturer of poly using both the Siemens and FBR processes. It has a production base in USA and also a JV with Samsung to make poly in Korea.

GCL Poly has been aggressively expanding into the downstream sector, becoming one of the top shipper of modules last year with more than 3 GW of panels being shipped last year. It is further expanding its c

ell and module capacity using the greenfield route.

Read more about GCL Poly’s solar panels here.

I think it is a very good price for GCL to acquire ~13000 tons of Korea capacity plus SunEdison’s USA poly produciotn facility, plus its IP at an overall $170 million with $20 milloin in debt. I am surprised why other polysilicon producers such as Hemlock, OCI and Wacker did not compete for Sunedison’s assets. These companies also are also quite cash rich, as polysilicon still generates good cash flows unlike other components of the solar supply chain which are mostly running into negative cash flows.

GCL’s capacity will go up, upto almost  90,000 ton making it by far the largest producer of polysilicon. Note this part of the supply chain has a limited number of players because of the large requirement of capex and importance of technology. It is not easy to build a cost competitive poly plant as many have found out painfully. Yingli Green Energy, Trina Solar and LDK Solar sunk many billions of dollars trying to build a competitive plant and then had to write down these assets, as they did not prove to be economically viable.