Author Dora Zhao
Updated July 29, 2022

Policies in favor of renewable energy development worldwide led to strong demand for renewable energy. Demand from large markets such as Europe, China, and Brazil beat expectation. Coupled with the situation across the supply chain in the first half of the year, InfoLink revised up module demand to 239-270 GW this year, a significant YoY growth of 25% to 34% from last year’s 178 GW of module installation.
2207_Regional demand trends 2022-2023_en_1

The industry has been paying close attention to solar supply capacity since 2020, especially the polysilicon sector. 

Observing the capacity and expansion trends in the polysilicon, mono-Si wafer, cell, and module segment, the expansion continues, but the pace of new polysilicon capacity commissioning falls behind demand as it did in 2021. Disproportional supply and demand remains in the upstream, putting the polysilicon segment under pressure.


Annual polysilicon capacity stood at around 726,300 MT (around 264 GW) at the beginning of 2022, and it is expected to reach 1,179,100 MT (around 442 GW) at the end of the year, an increase of 62%. The figure is forecast to hit 1,771,100 MT at the end of 2023, up 50% YoY, likely to ease short supply from late 2023. Persistently high polysilicon prices and the continued upward trend has made many manufacturers in the mid and downstream segment struggle. Indeed, the slow pace of new capacity commissioning disappoints the solar industry.

InfoLink’s calculation of this year’s real polysilicon supply is 873,796 MT (around 324 GW), with supply growing slowly each quarter instead of sharply. The global polysilicon production in the first half was around 392,042 MT (factoring in impacts of thinner wafers and changes to share of wafer sizes); production is estimated to reach 481,753MT in the second half, and the real supply will increase markedly from the end of the third quarter and concentrates in the fourth quarter. The production trends in the supply chain are subject to polysilicon production, which remains the bottleneck this year. 

Newly added capacity this year will come online steadily and slowly, with around 8% to 10% of increase between the first quarter and the third quarter. Production will not increase markedly until the fourth quarter. The wafer segment, in contrast, saw large-volume of capacity additions from existing and new manufacturers, with capacity growth outpaces that of polysilicon. Moreover, an incident occurred at a Tier-1 polysilicon manufacturer’s plant in the second quarter is also a factor that caused price to hike. Among these factors, the main reason behind price rally is the slow increase in polysilicon supply that falls short of demand.

Capacity of the top 5 largest polysilicon manufacturers becomes increasingly concentrated; it is expected to grow from 71% this year to 76% in 2026. Meanwhile, high profitability of polysilicon drew many manufacturers to engage in the business. It’s worth anticipating the capacity expansion of new players, such as Lihao, Runergy, Wuxi Shangji Automation, and Hoshine.

Polysilicon capacity overseas is highly demanded by manufacturers supplying the US market amid the China-Xinjiang conflict. Currently, the market share is stable, but there are still possibilities for manufacturers to expand polysilicon capacity overseas. Actual implementation of capacity projects is correlated to the developments of the U.S. and even Europe’s action and attitude toward China.

Another trend to watch this year is granular polysilicon capacity growth. Led by GCL, granular polysilicon produced by fluidized bed reactor (FBR) process is claimed to enjoy huge advantages in terms of technique and cost reduction. Moreover, carbon emissions embedded in the FBR process is lower, giving it advantage amid the low carbon transition. GCL has large-scale capacity expansion plans. 

This year is with great significance for GCL’s FBR granular polysilicon capacity expansion. There are four major reasons. Firstly, following the company’s commissioning of 10,000 MT and 20,000 MT FBR granular polysilicon projects at its Xuzhou facility in 2021, GCL will commission its third project with 30,000 MT in the third quarter of this year. Secondly, GCL’s Leshan-based facility will also commission a 100,000 MT FBR granular polysilicon project through phases in the third quarter, and likely to complete bringing all capacity online by the end of the year. As it requires three to six months for production and quality to improve, new capacity could be completely translated to real production. Such progress is faster and more optimistic than earlier prediction, as GCL has improved in terms of funding and cash flow, allowing it to inject funds and accelerates project implementation. Thirdly, GCL Baotou is the second manufacturing base outside of Xuzhou, where it has expansion projects of 100,000 MT in phase 1 and then 200,000 MT. The facility is expected to commission in the second half of the year; actual progress remains to be monitored. Lastly, GCL’s expansion of FBR granular polysilicon outside of its largest base in Xuzhou has received wide attention from the industry and investors. The industry expects the FBR granular polysilicon project to achieve mass production and prove its cost control ability and usage feedback, while observing the progress of huge capacity expansion. GCL needs to demonstrate the future of FBR market through implementing these projects.

Supply and demand determine prices. Manufacturers eventually chose to plan its production and scale after evaluating future trends, market opportunities, and the competition strategy. At present, limited capacity and production led to short polysilicon supply and surged prices as high as almost a decade ago. There’s a tendency of focusing on expansion in the profitable polysilicon segment among manufacturers. Indeed, the segment has gained profits in the recent two years that it had never achieved in many years before.
While the solar industry develops rapidly, disproportional supply and demand occurred often in the industrial chain. It had experienced limited mono-Si wafer capacity and wafer shortage for a long while in the past, and events of this kind may happen in the future. After going through these obstacles, the industry may face surplus capacity when it enters a complete mature stage.

為提供您更多優質的內容,本網站使用 cookies分析技術。若繼續閱覽本網站內容,即表示您同意我們使用 cookies ,關於更多 cookies 資訊請閱讀我們的 隱私權政策