Chinese polysilicon giant Daqo New Energy’s plan to relentlessly bear down on the price of the raw material for PV panels passed another milestone today, with news that the latest phase of its production ramp up is operating at full capacity and ahead of schedule.
The completion of Phase 3B of the Chongqing-based company’s strategy takes its production capacity up to 30,000 MT, and also triggers an arrangement with its electricity supplier in Xinjiang for cheaper power supply.
In line with the terms of that arrangement, Daqo announced in a press release this morning, the company expects to be manufacturing polysilicon for just $7.50/kg at some point in the first three months of the Western new year.
In an ominous message for European rivals such as Germany’s Wacker Chemie, Daqo CEO Longgen Zhang said: “Our teams will continue to optimize Phase 3B’s operational efficiency, which will enhance our competitive advantage in cost structure and quality.”
Poly output set to double
Far from being an idle boast, Zhang predicted further price falls when a “de-bottlenecking” exercise associated with the latest production expansion drives up output to 35,000 MT by the end of June.
And some six to nine months further out, Daqo is hoping to have Phase 4A of its facilities online, doubling its polysilicon output to 70,000 MT.
Daqo is gambling on the oft-seen Chinese corporate strategy of blowing competitors out of the water by cornering a huge slice of the market at wafer thin margins as world demand for PV rebounds.
“We remain confident in our strategy and believe our leadership position in the polysilicon industry will further strengthen as the market recovers,” added Zhang in today’s announcement.
This article was amended on 09/05/19 to reflect the Daqo CEO is Mr Zhang, rather than Mr Longgen.