AU Optronics unit to pull out of solar poly business

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A unit of global OEM manufacturer AU Optronics is to halt production of polysilicon for the solar industry and focus instead on the less competitive ingot market.

M.Setek, which is based in Tokyo, issued a statement via AU Optronics that said the company no longer had a “competitive advantage” in operating in the solar polysilicon industry and is set to take a hit of $208 million to write down its assets, according to Bloomberg.

Changes in polysilicon supply and demand patterns have left M. Setek disadvantaged. Poly prices have fallen by more than 80% over the past five years as bigger players have entered into the solar industry to feed the insatiable demand for polysilicon. The effect has been a lowering of prices that has served to squeeze out some of the smaller players.

Data compiled by Bloomberg shows that M.Setek is no longer in the top ten makers of polysilicon, and will now focus exclusively on the production of ingots for the solar industry. The sector is now largely dominated by a handful of bigger producers, including Germany’s Wacker Chemie, U.S. company Hemlock Semiconductor, Hong Kong’s GCL Poly and South Korea’s OCI.

"No volume polysilicon production by AU Optronics was tracked during the past couple of years, so this announcement is not surprising," Bloomberg New Energy Finance (BNEF) analyst Wang Xiaoting said.

The analyst added that the polysilicon industry in 2015 was bedeviled by more than 20% oversupply, "which was the intrinsic reason for a 30% drop of spot price over the year." The glut overhang is expected to continue throughout 2016.

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