The Taiwan-based company made the announcement yesterday. Now, it says it will initiate an unidentified number of workforce reductions, shutdown the manufacturing facilities and hold an asset sale at AE Polysilicon Corporation (AEP). The latter measure is still pending stockholder approval, however.
Motech added that it has invested around US$41 million in AEP, including investments worth around $26 million and a prepayment of $15 million since the companys inception in 2006. In a statement released, it wrote, "The company is going to conduct impairment testing according to ROC SFAS No. 35, ‘Accounting for Asset Impairment’. Should the fact of impairment arise, the losses will be reflected in the Companys 2Q12 financial statements."
According to the Taipei Times, Motech holds a 30 percent stake in AEP. No one from the company could be immediately contacted for comment.
As has been widely reported, polysilicon costs have continued to fall. At the start of May, ReneSola said it was targeting stand-alone polysilicon costs of under $20 per kilogram (/kg). In the first quarter of 2012, it added that costs increased to roughly $33/kg. However, it said that since the end of Q1 2012, costs have returned to around $30/kg. By the end of Q2 2012, they are predicted to decrease to approximately $25/kg, and to $22/kg by the end of 2012.
Shortly afterwards, IHS iSuppli said that average selling prices (ASPs) for polysilicon dropped by 11 percent in April, to a new 2012 low of US$27.20. Overall, spot prices were said to range from $19.50/kg to $30/kg. In comparison, long term agreement (LTA) contract prices ranged from $18.50 to $37/kg; the ASP was $29.40. This translated into a decline of nine percent for spot market prices, and 7.8 percent for LTAs.
Meanwhile, back in April, the company further predicted that prices would fall to $22/kg by the end of the year. According to pv magazines weekly PV poll, 46.2 percent of respondents believe that prices will drop below $22/kg by the end of 2012.
Todays polysilicon prices are a far cry from those seen a couple of years ago in 2010, due to a temporary supply bottleneck, polysilicon prices rose from USD$55/kg to a "high" of $75/kg.