Tongwei's $4B Bet on Solar Recovery
- Tongwei Co. pushes ahead with ambitious expansion plans while Chinese solar sector braces for inevitable consolidation and price wars. The 28 billion yuan ($3.9 billion) factory in Inner Mongolia promises 500,000 tons of industrial silicon and 400,000 tons of polysilicon annually.
Tongwei Co., the world’s largest manufacturer of a key material for solar panels, announced plans to build a 28 billion yuan ($3.9 billion) factory in Inner Mongolia. The two-phase project will have the capacity to produce 500,000 tons of industrial silicon and 400,000 tons of polysilicon annually. The expansion is timed to sector recovery amidst a current period of consolidation and price wars. Funding for the facility will come from existing capital and loans from financial institutions. Falling profits in the Chinese market, caused by accelerated growth in output without a rise in demand, is forcing consolidation in the industry. It is estimated that about a quarter of polysilicon makers will be forced out of business in the next 12 to 18 months.
What Impact Will Tongwei's Expansion Have on the Solar Industry?
- Expansion of Tongwei Co. is likely to secure the company's position in the solar sector and increase the stability of the solar industry as a whole.
- The new facility will increase the production of solar grade silicon, an important material for solar panel production, which will results in improved cost competitiveness and improved competitive edge over rivals.
- The increased production capacity will help meet the rising demand for solar products, which is expected to grow as countries move towards clean energy sources.
- The increased production capacity will also help reduce the cost of solar panels, as the cost of silicon is one of the biggest factors in determining the cost of solar panels.
- The expansion may also lead to increased investments in research and development, further driving innovation and improving the efficiency and quality of solar panels.
- The new facility will also help create more jobs in the region, boosting the local economy.
