Opportunities for Polysilicon Industry Companies – TOIPO CAPITAL
High-purity polysilicon is the basic raw material of electronic industry and solar photovoltaic industry, and in the next 50 years, there won’t be any other material which could replace silicon to become the main raw material of electronic and solar photovoltaic industries.
With the rapid development of information technology and solar industry, the demand of the whole world for polysilicon grows rapidly; the supply in the market can’t meet the needs. In 2006 the production of polysilicon was 37 thousand tons and the market gap was about 8 thousand tons in the world. In recent years, the rapid growth of global solar cell production directly drove the rapid demand growth of polysilicon. Influenced by this, the price of polysilicon which is the main raw material of solar cell increased quickly.
China polysilicon industry started in the 1950s, the industrialization was completed in the middle of 1960s, and to 1970s, the manufacturers once developed to more than 20. But due to the lagging process and technology, big consumption, high cost, etc., the vast majorities of the enterprises were in deficit and stopped production or changed production one after another.
In 2006, the output of monocrystalline silicon used for domestic integrated circuit was 551 tons, the demand for polysilicon was about 847 tons; solar cell output was 370 MW, demand for polysilicon was about 4100 tons. The total demand for polysilicon in 2006 was close to 5 thousand tons, while the output of China polysilicon was only 287 tons, the ratio between supply and need was less than 6%.
There is a big gap in the independent supply of China polysilicon, over 95% polysilicon materials need to be imported, the supply has been controlled by others for a long time while the burst increase of price, which have already endangered the development of many polysilicon’s downstream enterprises and become the bottleneck problem of the development of China information industry and photovoltaic industry.
Because of the continuous increase of the polysilicon demand, under the stimulation of enlarging market gap and rising price, a wave of cooperating with polysilicon projects appears in our country. The investment wave of polysilicon projects could be the inevitable result of rapid development of solar cell market, but the development of China silicon material industry should be cautious and headlong rush status should be avoided; the key is to master the core technology, otherwise, it is difficult to escape from the status controlled by others.
Because the demand grew rapidly, but the supply development was limited, 2007 was the year in which solar polysilicon was most wanting and price rose crazily. The “11th Five Years” will be the golden period for the rapid development of China polysilicon industry.
TOIPO CAPITAL is an investment banking, securities and investment management firm. Founded in 2005, the firm is headquartered in Hong Kong and maintains offices in Beijing, Shanghai, Hangzhou and Silicon Valley. TOIPO CAPITAL provides a broad range and high quality services worldwide to a diversified and substantial client base that includes corporations, financial institutions, governments and high net worth individuals. TOIPO CAPITAL has intimate collaboration with the media and the governmental organizations in China, both nationally and provincially.
With profound knowledge and understanding of energy industry, TOIPO CAPITAL is looking for energy industry companies with strong competitive advantages or high-speed growth. Hopefully the retained profits of the year 2007 is no less than RMB10million yuan, and its annual growth rate will maintain +30% in the next 5 years.
Should you have any questions, please contact the department of assets and equity exchange, TOIPO CAPITAL
Grace SUI
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