As the competition intensifies in the PV industry, enterprises are using different methods to consolidate their market status. Zhonghuan Semiconductor, for example, has put forward a plan to pour 20.6 billion yuan on the expansion of its production capacity and R&D capacities.
On April 7th, Zhonghuan and its controlling shareholder TCL technology reached cooperation agreements with Inner Mongolia and Hohhot governments on the construction of an industrial cluster in Hohhot. The cluster is planned to include a high-purity polysilicon project with a total capacity of about 120,000 tons, a semiconductor mono silicon and supporting projects, and a national silicon R&D center, with a total investment of about 20.6 billion yuan.
Prior to this, Zhonghuan has already invested a total of 40 billion yuan to build a solar-grade mono silicon production base in Inner Mongolia.
Among the planned projects, the 120,000-ton polysilicon project attracted most of the attention from the industry. It demonstrates Zhonghuan’s determination to strengthen upstream production capacities. It is also a key step for the company to further consolidate its leading position in the industry.
Polysilicon has been the bottleneck for the industry for two years now. Downstream enterprises have experienced mounting pressures since the latter half of 2020 and their hopes for cheaper polysilicon have been damped down.
Zhonghuan, a leading wafer manufacturer, has felt the pain directly. Wafer and module are the major sources of its income, taking up over 80% of the revenue in the past five years. This means Zhonghuan has huge demand for polysilicon, whose price hikes have posed great challenges to the company’s supply and profits.
Zhonghuan stressed in its announcement that the main purpose of the high-purity polysilicon project is to extend, supplement and strengthen the industrial chain. It could contribute to cost reduction and supply chain stability throughout the industry, while consolidating the company’s competitiveness, Zhonghuan said.
Due to the continuous fluctuation of the solar value chain, PV enterprises are particularly determined to build an integrated production system, and Zhonghuan is no exception.
At the mono wafer end, Zhonghuan’s production capacity of silicon wafer will reach 85 GW in 2021. With the completion of its phase VI Ningxia plant, the total capacity will exceed 135 GW. In addition, in 2019, Zhonghuan became the controlling shareholder of Huansheng Solar by acquiring 40% equity held by Dongfang Electric. In the past few years, Huansheng Solar has become a rising star in the module market.
Besides, by acquiring shares in Maxeon Solar, Zhonghuan has further extended its cell and module production capacity, while developing ground-mounted and distributed solar plants globally.
