China wafer output set to rise despite weak demand and inventory pressure

Free-On-Board (FOB) China M10, 210R, and G12 wafer prices remained stable at $0.138/pc, $0.147/pc, and $0.169/pc, respectively, unchanged from the previous week, according to the OPIS Global Solar Markets Report released on June 13.

Wafer market fundamentals continue to mirror those of the polysilicon sector, with bearish sentiment, weak demand, and ongoing inventory accumulation remaining the dominant themes, according to market participants. Based on manufacturers’ production schedules, industry sources estimate wafer output reached nearly 50 GW in May and could increase further to approximately 55 GW in June.

A market participant noted that the increase in production is primarily being driven by vertically integrated manufacturers and major specialized wafer producers. Leading first-tier wafer makers are generally maintaining utilization rates below 50%, while financially weaker specialized manufacturers are operating at extremely low levels. Market reports have also emerged suggesting that some producers have begun selling portions of their ingot-pulling equipment as part of efforts to address financial pressures.

On the export front, industry participants said demand has softened in recent months because significant volumes of wafers were shipped to bonded warehouses in India, Southeast Asia, and Africa ahead of China’s export tax rebate cancellation, which took effect on April 1. These earlier shipments have reduced the urgency for immediate procurement. Nevertheless, a leading wafer manufacturer expects demand from overseas markets to improve in the second half of the year, particularly as domestic cell manufacturing capacity in India ramps up.

Overseas manufacturing expansion has not been smooth across all regions, however. A manufacturer that had previously announced wafer manufacturing plans in the Middle East is reportedly facing challenges and delays in advancing the project due to financing and partnership-related issues.

Still, improving geopolitical conditions in the Middle East are beginning to support expectations for smoother logistics and project execution elsewhere in the region. One market source highlighted a Middle Eastern solar cell manufacturing project that began initial production earlier this year.

The facility reportedly operated at low utilization during the first half of 2026 due to production ramp-up challenges and geopolitical conflict. However, following an easing of tensions, the project is now targeting a much higher operating rate by the third quarter.

Suppliers supporting the project have already received corresponding orders and have begun arranging shipments, the source said. As the facility gradually matures and expands production, it is beginning to establish a new trade flow for internationally traded wafers, potentially creating additional demand channels outside traditional markets, the source added.

OPIS, a Dow Jones company, provides energy prices, news, data, and analysis on gasoline, diesel, jet fuel, LPG/NGL, coal, metals, and chemicals, as well as renewable fuels and environmental commodities. It acquired pricing data assets from Singapore Solar Exchange in 2022 and now publishes the OPIS APAC Solar Weekly Report.