Two large Chinese silicon ingot and wafer manufacturers announced bold plans to expand their production capacity beyond what has been seen so far. In the process, they can change the entire upstream solar manufacturing pattern.

After being processed into single crystal silicon and cut into half-square pieces, the material is cut into thin slices, ready for further processing.

At the end of February, Shen Haoping, Chairman and General Manager of Zhonghuan Semiconductor, braved the severe cold to personally inspect and install a new single crystal ingot furnace at the company's Inner Mongolia factory located between the Blue Mountains and the Hetao Plateau.

This is the fourth phase of the Hohhot plant, where Zhonghuan has been doing business for nearly ten years. The facility already has the capacity to produce 5 GW of monocrystalline silicon ingots per year, and new machines that are being prepared will push this capacity up to 10 GW, which exceeds the total global demand for solar photovoltaics in 2009.

Six and a half weeks before this, local government officials were visiting another new facility with an annual output of 10 gigawatts, located 3,000 kilometers south of the subtropical mountainous area in Yunnan Province. Like the silicon ingot factory in Zhonghuan, Longi's wafer cutting plant in Chuxiong Prefecture also processes monocrystalline silicon and cuts it into silicon wafers as raw materials for solar cells.

The plant will be supplied by Longji's two large ingot casting facilities in Lijiang and Baoshan, which are also located in Yunnan Province, as part of the company's ongoing wave of expansion. This includes ingot pulling and wafer slicing facilities under construction in Ningxia, northwestern China. IHS Markit predicts that by the end of this year, Longi's silicon ingot and wafer production capacity will nearly double from last year's 13.5 GW to 22.5 GW.

When considering the potential expansion of other monocrystalline silicon ingots and wafer manufacturers, this indicates that the structural transformation of monocrystalline silicon supply may reconfigure the entire upstream solar energy landscape, and it may be possible to convert monocrystalline silicon in a shorter period of time. The advancement of solar energy to market dominance is better than previously expected.

Single crystal and polycrystalline single crystal (single) silicon refers to silicon grown from a single crystal. This is done in an ingot furnace using the Czochralski method, with polycrystalline (poly)silicon as the raw material. Using a seed crystal, a long tube of monocrystalline silicon is drawn from the molten silicon block. Before being sawed into half-square pieces and sliced ​​into thin slices.

Monocrystalline silicon has higher efficiency than polycrystalline silicon, and has higher crack resistance during the production of cells and modules. Due to the additional process, its own manufacturing cost is higher, and it has become a raw material for high-efficiency battery design, mainly but not limited to rooftop applications, where multi represents the largest share of mass-produced solar energy.

At the end of 2015, the price of monocrystalline silicon wafers dropped to roughly the same as that of polycrystalline silicon wafers, which changed the market dynamics and allowed companies to choose to use any technology at a similar price.

One year later, monocrystalline demand increased again and prices rose; however, this led to a shortage of mono products. According to independent analyst Corrine Lin, monocrystalline silicon wafers accounted for only 28% of global wafer supply last year, but this was limited by a "serious" shortage. Although Longji, Zhonghuan and other companies madly put silicon ingots and wafer factories online, they still can't keep up with demand.

This is largely driven by the booming Chinese market, in which monocrystalline solar accounts for 40% of demand, partly because of the country’s “Front Runner” program, which is a reverse auction program specifically for high-efficiency products. .

The story of the rise of LONGi monocrystalline silicon is largely the story of LONGi and Zhonghuan. Of the two, Zhonghuan is much older and has been in the semiconductor industry since the 1950s. The first mention of its future role in the solar industry was that the company supplied solar cells for satellites in 2000-in the same year, Longi was established.

Different from other silicon ingot and wafer manufacturers, Longi and Zhonghuan use monocrystalline silicon to manufacture solar products, and have rapidly risen to become the largest manufacturers of monocrystalline silicon ingots and wafers, as well as the largest technology scale in this field. One of the fastest growing companies. In particular, LONGi's growth rate is dizzying, from just over 2 GW of wafer production capacity at the end of 2014 to 13.5 GW in three years.

Longi also produces monocrystalline cells and modules, including those based on emerging tile cutting and multi-wire technologies. However, the company's real expertise-and most of its production capacity-is the manufacture of ingots and wafers. Another notable feature of Longi is that the company's R&D investment is very high. The company estimates that its R&D investment in 2017 will account for about 7% of its annual revenue. This is unheard of among Chinese photovoltaic manufacturers and is about twice as much as SunPower or First Solar spent last year.

A key to LONGi's success in the field of silicon ingots and wafers may be its equipment, which is provided by a company of LONGi's only customer. "The core technology is in the hands of equipment suppliers," said Dr. Xie Tian, ​​LONGi's quality management director.

It is not clear whether Longi Lucki owns these equipment suppliers, and whether this huge R&D investment is in these companies. Either way, the company reports that it is achieving results. "In the past few years, we have definitely got a good return on this kind of R&D investment, especially the pull and wafer slicing technology," Xie told Photovoltaic Magazine.

This is the basis of Longji Acer's ambitious expansion plan. The company's goal is to achieve 45 GW of silicon ingot and wafer production capacity by 2020.

Polysilicon dynamics The large number of silicon ingots and wafers planned by Longji and Zhonghuan will affect both upstream and downstream. First, someone needs to provide all the polysilicon used to cast the ingot. To meet its needs, Longi signed a contract with South Korean OCI to purchase approximately 64,600 tons of polysilicon from South Korean OCI in the next three years at a total cost of slightly more than US$1 billion. Longi’s Xie pointed out that quality is a problem when buying polysilicon for monocrystalline silicon and wafer production, and imported polysilicon may be even better in this regard. "Regarding the quality of OCI's polysilicon, it is better than some other companies in China, and better," Xie told Photovoltaic Magazine. However, he said that this situation will change over time. "For the future, we can see a lot of progress for Chinese manufacturers," Xie pointed out. "They are doing a lot of activities to improve the quality of their production. In the future, the quality gap between OCI and these poly manufacturers will become smaller and smaller." Zhonghuan did not respond to an interview request from Photovoltaic Magazine, but our source indicated that the company It also purchases polysilicon from OCI, Wacker and GCL Poly. The company has signed a joint development agreement with GCL to supply polysilicon from factories under construction in Xinjiang.

GCL not only brings huge financial strength and market share to its transactions, but also technology. The company has acquired fluidized bed reactor (FBR) and constant Czochralski silicon technology from SunEdison, and pointed out that it is applying these technologies to cheaper Chinese manufacturing equipment.

The single expansion of Longi and Zhonghuan may bring considerable prosperity to WACKER and OCI. Although WACKER is able to negotiate with the Chinese government on the minimum price for its polysilicon exports to China, due to China's high tariffs on US polysilicon, other large producers such as Hemlock Semiconductor and REC Silicon may be excluded.

Downstream effects There are still some uncertainties about who will buy a large number of monocrystalline silicon wafers to be produced by Longji and Zhonghuan. Part of Zhonghuan's products will be handed over to SunPower through the DZS joint venture to manufacture P series components in China, and Longi will supply some wafers for its internal production. But Longi plans to use less than 40% of the wafer output internally, which still leaves a huge product volume.

Corrine Lin said that most of this will go to vertically integrated photovoltaic manufacturers in China and South Korea. Although it is not clear how much they can absorb, Longi is optimistic about the change in demand. The company has the ability to produce single crystals in large quantities and at low cost, and believes that the higher efficiency of the technology is sufficient to offset the increased cost of drawing single crystal ingots.

"Longi is pushing the industry to shift from polycrystalline to monocrystalline," Fang Hongbin, technical director of Longi, told Photovoltaic Magazine.

One of the factors that may stimulate this situation is the success of passive emitter back contact (PERC) photovoltaic cells based on P-type monocrystalline silicon wafers, and it is not accidental that LONGi recently achieved a new world record of 23.6% efficiency using P-PERC Technology.

"We believe that P-PERC will become mainstream in the next few years," Xie predicted.

Given the prominence of the front-runner program, as demand in China grows, this may also change the market.

Others are less optimistic about the potential of this rapid movement. Although Corrine Lin predicts that monocrystalline silicon wafers will account for 40% of global demand for about 100 GW this year, she also predicts that monocrystalline silicon wafers will be oversupply in the second half of 2018.

Cost and market Longi has proven that it can be delivered at low cost. The company reduced the price of its monocrystalline silicon wafers from 0.67 US dollars to 0.63 US dollars immediately after the Lunar New Year. At the time, Corrine Lin stated that no one expected this to happen. This in turn has caused other wafer manufacturers to cut prices and may renegotiate polysilicon contracts.

It is expected that the oversupply in the second half of the year will inevitably drive down prices further. "Longi will not only compete with Zhonghuan, but also with multi-wafer companies," Corrine Lin predicted.

As far as Longi is concerned, it said it is trying to develop the single crystal industry. "We hope to create a healthy ecosystem so that everyone can grow together," said Fang Hongbin, LONGi's technical director. However, the oversupply of monocrystalline silicon wafers can easily trigger a price war in the second half of 2018, because the company is still trying to maintain market share despite the decline or even negative profit margins.

Lin attributed Longi's price success in part to the company's economies of scale, which may be a key advantage in this case. In the next few years, it will be interesting to see if Longi and Zhonghuan can achieve their ambitious expansion plans, and what this means not only for the wafer field, but also for the entire upstream landscape.

This article was revised on April 16, 2018, deleting the statement regarding the relative expected polysilicon production capacity of GCL-Poly and LONGi.

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More articles by Christian Roselund

Wow! Almost doubled this year, from 13.5GW to 22GW, and then plans to double it again to 45GW by 2020. I hope so! The world can definitely use all the solar photovoltaic power it can obtain.

The cost of doubling production capacity in 2018 is much lower than in 2013. Can we see 55-60GW monocrystalline demand in 2019? At almost the same price, the demand for high efficiency is high.

If SoftBank prefers mono, it may have started the mono revolution. India will follow SoftBank.

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