OCI Holdings, the only producer of polysilicon for solar energy in South Korea, is expanding its supply volume to the United States this year, anticipating improved performance. This is because the imposition of tariffs on Chinese solar products bypassing Southeast Asia has increased the competitiveness of non-Chinese polysilicon like OCI Holdings. The scrapping of Qcells' plans for self-production and procurement of polysilicon, a major North American customer, has also contributed to strengthening OCI Holdings' position.
According to the Financial Supervisory Service's electronic disclosure system (DART) on the 8th, OCI Holdings recorded sales of 908.8 billion won and an operating profit of 20.5 billion won in the third quarter of last year. This represents a decline of 4.3% in sales and 77.1% in operating profit compared to the previous quarter. The company said, "Due to the uncertainty from the investigation under the Antidumping and Countervailing Duty Law on the bypassing of four Southeast Asian countries (Thailand, Vietnam, Cambodia, Malaysia), the order volume from major customers in that region decreased sharply, leading to a drop in revenue."
The U.S. government launched an investigation under the Antidumping and Countervailing Duty Law last June to control the inclusion of Chinese raw materials in the value chain of solar products used in the country. Chinese companies have established production subsidiaries in Southeast Asia to avoid exporting products to the U.S. OCI Holdings also produces polysilicon for solar energy at its Malaysian subsidiary, OCI M, but does not use Chinese raw materials.
In November of last year, the U.S. announced the results of its investigation, deciding to impose provisional antidumping tariffs of 21.31% to 271.2% on Chinese companies exporting via Southeast Asia. As a result, there are expectations that the demand for non-Chinese polysilicon produced by OCI Holdings and others will significantly increase starting this year.
The cancellation of Qcells' plans to internalize polysilicon, a major customer, is another factor raising expectations for an increase in OCI Holdings' supply volume. In 2021-2022, Hanwha Solutions became the largest shareholder of the Norwegian polysilicon company, REC Silicon, by investing approximately 250 billion won.
Qcells is constructing a 3.3 gigawatt (GW) ingot and wafer production facility at its plant in Cartersville, Georgia, aiming for completion by the middle of this year. The facility was planning to receive polysilicon produced by REC Silicon at its Moses Lake plant in Washington state as raw material. An ingot is a cylindrical crystal made by melting polysilicon, which is then sliced thinly to create wafer discs.
However, REC Silicon decided to halt operations at the Moses Lake plant after failing to meet the purity requirements demanded by Qcells at the end of last year. This means Qcells is in need of a new supply source for polysilicon.
OCI Holdings entered into a polysilicon supply contract worth 1.4 trillion won with Qcells for a duration of 10 years in 2022, and projections suggest that further supply contracts may be established. Kyung Dong-jin, a researcher at Hyundai Motor Securities, noted, "With the delivery failure of REC Silicon, OCI Holdings' position within the North American supply chain will become even stronger," adding, "Full capacity operation is expected to begin in the second half of this year."
According to financial information provider FnGuide, OCI Holdings is expected to record sales of 3.9496 trillion won and an operating profit of 393.6 billion won this year. This marks increases of 10.7% in sales and 81.7% in operating profit compared to previous year estimates.
OCI Holdings is also reviewing plans to establish a joint venture with leading solar energy companies in North America to build wafer and cell plants locally. In this case, it would secure a reliable demand source and increase supply stability. The researcher stated, "If uncertainties surrounding solar energy policies are resolved following the inauguration of the Trump administration, the establishment of the joint venture is also expected to be confirmed."