China set to become the "Super Solar Power" in 2013
January 16, 2013Changes your Money went through in 2012
January 17, 2013Polycrystalline silicon or Polysilicon (poly-Si or “poly”) is a material consisting of multiple small silicon crystals. Poly is highly pure form of silicon and is much costlier. Polycrystalline silicon can be as much as 99.9999% pure.
Solar Use of Polysilicon (Solar Wafers and Ingots Raw Material)
Once Polysilicon is produced, it has to be made into flat wafers which require further industrial processes like pouring the metal in crucible to make ingots (Czochralski Process) and then cutting the ingots by wiresaws to make solar wafers. The solar wafers are then converted into solar cells by processes like diffusion, etching etc. Note silicon solar PV panels growth has exploded in the last 10 years and the costs have fallen dramatically. Solar cells made from a single crystal of silicon are known as monocrystalline solar cells, while others are known as multicrystalline solar cells.
Hemlock & REC – The Big Polysilicon Producers cut on Production & Fire Workers
Hemlock Semiconductor, which is a leading player in the industry for more than 50 years now, plans to lay off approximately 400 employees in Michigan and Tennessee and reduce production, in the coming weeks as a result of massive oversupply in the polysilicon industry. The main reasons defined for the above action are the:
i) Global solar wars between US, Europe and China, which has resulted in significantly decreased orders from China and
ii) Increased Industry Oversupply.
The Tennessee, Clarksville facility, was very near to its completion phase and will now only maintain a minimum workforce.
“This is a difficult but necessary decision to enable Hemlock Semiconductor to navigate the volatility in the polysilicon and solar industries,” said Andrew Tometich, president of Hemlock Semiconductor. “The unresolved trade disputes among the U.S., China and Europe are a major factor in Hemlock Semiconductor’s actions as the threat of tariffs on U.S. polysilicon imported into China has significantly decreased orders from China, which is home to one of the largest markets for our products.”
REC Solar which is in Solar business for almost 16 years now, also to shut down 2400 tons of high cost polysilicon capacity. As e result, the company will be left with 20,000 tons of FBR capacity. Solar Companies in Europe have been falling like nine pins, for almost a couple of years now and the carnage shows no sign of stopping. Though all solar panel companies are ailing, not all companies had thrown in the towel. Still other European solar companies like REC, Solarworld, Silken and others have continued though they have had to severely curtail their operations. In the past, REC Wafer which is a subsidiary of the REC solar group went bankrupt. REC Wafer used to be the biggest supplier of solar wafers to the industry and was considered almost invincible. Now the news is REC plans to reduce its poly production, at one if its two U.S. facilities. This would result in job losses and a reduction of 2,400 MT in output.
“To remain competitive, the organization in Moses Lake has worked very hard this past year to drive operating costs down, but under these current economic conditions it is not viable to continue production when market prices for the Siemens solar chunk product have fallen well below the cost to produce it,” said Tore Torvund, president of REC’s Silicon division.
Also Read on GWI Solar Panel Manufacturers – Guide to the Biggest and Best.
Why did the Polysilicon Demand Go Down
Polysilicon which is the most used raw material for manufacture of solar panels, has crashed to unheard of levels as the capacity glut drives prices below even variable costs. Polysilicon price which had been hovering around the $20/kg levels for the last 6 months, has gone down to as low as $12/kg for Tier 2 producers. It remains $15/kg for the larger Tier 1 polysilicon companies like Wacker, Hemlock and others. The price seems surreal when compared to the $400/kg spot price of polysilicon on 2008 and 2009.
The 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. This led to an increase in Polysilicon capacity which grew 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 established Polysilicon Companies like Wacker, Hemlock too added capacity though in lower sizes. There were also numerous small companies which entered the polysilicon space, but they were weeded out gradually, as they found the process too hard to master.