Flurry of new Chinese silicon production

A number of new polysilicon projects are being initiated in China, defying industry expectations.

Liaoning, China-based Fushun Koshuha Foundry Co. Ltd. has just signed with U.S. company PPP and a Japanese firm on a high-purity polysilicon project last week, reports Liaoning Daily.

The project is expected to receive total investment of $1.2 billion and start construction in April. Scheduled for completion in October 2011, the project is expected to reach annual production capacity of 10,000 tons to reach revenue of RMB 13.7 billion.

Jiangsu province also announced plans at a Renewable Energy Industry Conference on last week to subsidize 260MW of solar electricity and support an annual polysilicon production capacity of 30,000 tons by 2011, the official site of meeting participant GCL Silicon Technology Holdings said on Monday.

Jiangsu has designated Xuzhou, Yangzhou and Lianyungang as bases for the province's polysilicon industry, according to the site. GCL Silicon has a polysilicon base in Xuzhou.

Sichuan, China-based Tongwei Co Ltd. may break ground as soon as the first half of 2009 on the second phase of a polysilicon project with production capacity of 3,000 tons and total investment of more than RMB 2 billion, reports Reuters.

Depending on overseas markets, the company says it may then begin construction on a third phase with annual capacity of 6,000 tons, bringing the project's total capacity to 10,000 tons per year before late 2010. The project's first, 1,000-ton phase officially began production
in September 2008, when Tongwei subsidiary Yongxiang began manufacturing polysilicon on its 800-ton test line. The three phases are expected to receive
total investment of RMB 5 billion.

And Zhejiang, China-based Zhejiang ProPower Silicon began construction on a solar grade polysilicon project in Shangyu, Zhejiang province last week, reports Solarbe.com. The project's first RMB 130 million-invested phase plans to start production in September 2009 and reach capacity of 1,000 tons in December, said the report.

Total capacity is expected to hit 5,000 tons in 2010, the report said. The project is to use a chemicophysical process to produce polysilicon feedstock, developed in-house, which the company claims requires only two-thirds of the cost and five-sixths of the investment of conventional processes.

Companies have exited the polysilicon business in recent months, citing oversupply concerns (see Trina Solar drops plans for polysilicon plant). Some analysts predict the worst polysilicon inventories are still to come (see China solar market in late 2009 spells glut).

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