China Silicon Industry

China Silicon Industry

Volume 3 Number 12 Dec. 25th, 2010

China Silicon Industry

CSI

 ZS3 2010.12.25

Published by:

Focus The 3rd (2010) World Polysilicon & PV Industry Summit successfully held in Chengdu, China

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News Flash China Research Center of Silicon Industry Publisher: Cheng Changjin [email protected] Brant Bai [email protected] Executive Chief Editor: Emily Zhou [email protected] Correspondents: Judy An [email protected] Linda Qiu [email protected] Add: 53#, Xiaoguan Str. Andingmenwai, Beijing 100029 China Tel: +86-10-64415355 Fax: +86-10-64444036-893

Donghai Silicon Material Industrial Base reviewed and approved under the “Torch Program” 1st state-level silicone corporate technical center set up Sichuan BioMax Si&F New Material new producing line started to build GCL-Poly increases polysilicon capacity and expands investment in Suzhou LDK polysilicon capacity exceeds 10,000 t/a Guifeng to commission Ⅱ phase of its silicone monomer project next spring China export tariff rate for silicon metal remains at 15% CAFSI elects its 6th leadership Tension on the Korean Peninsular affects export of South Korean Sanyou Chemical’s 60,000t/a silicone monemer project commissioned “Golden Sun”boosting the Chinese PV market Dow Corning’s China Business & Technology Center to focus on sustainable innovations

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Interview How vacuum solutions are helping to reduce costs in silicon manufacturing Lowering the cost of manufacturing polysilicon Application of FBR technology Globe leading solar PV company via sustainable profitable growth Third generation Siemens process is here:ultra-pure polysilicon at $19/kg

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Conference Paper Situation of Chinese polysilicon and PV market Game between low-cost and high-quality polysilicon technologies

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Market Main photovoltaic industrial parks in China

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Statistics Related Trade Data

CRCSI All right reserved, unauthorized, may not allowed to be copied or reproduced. Welcome to provide the news clues, and welcome the contributions. News Hotline: +86-10-64415355 Enterprise news, please send to: [email protected]

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Focus

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The 3 (2010) World Polysilicon & PV Industry Summit Successfully held in Chengdu, China To improve the fundamental work of the PV industry, accelerate energy conservation and implement of low-carbon economy and drive the healthy development of the Chinese silicon industry, “The 3rd (2010) World Polysilicon and PV Industry Summit”, sponsored by China National Chemical Information Center (CNCIC) and organized by China Research Center of Silicon Industry (CRCSI), was successfully held during Dec 8-9 in Chengdu, China. Delegates from domestic and overseas companies delivered excellent speeches on the summit, including Mr. Fu Xu, president of CNCIC, Mr. Wu Dacheng, Vice director of China Photovoltaic Society, Mr. Russ Hamilton, vice president of GCL Solar Energy Technology Holdings Limited, Mr. Mark Dassel, Executive director of LXE, Mr. Mozer, president of Centrotherm, Mr. Pu Xiaodong, vice general manager of Sichuan Xinguang Silicon Technology Co., Ltd., Mr. Kim, senior manager of OCI, Mr. Servini, business supervisor of GT Solar and other experts from CDI, Oerlikon, Elkem, Best Solar, Tainergy, Thermo Fisher, Siemens, Sichuan Yongxiang Co., Ltd., Guangzhou GBS, Nanjing Dalu, etc., and the summit attracted over 260 participants from the USA, Norway, Japan, Korea, Germany,

Dec. 25th, 2010

Spain, India, Taiwan and mainland China. Mr. Fu Xu pointed out that Chinese silicon industry is facing more opportunities as the industry is recovering gradually under the stimulation of domestic and overseas photovoltaic markets demands, the acceleration of the industrialization and urbanization process as well as Chinese energy structure. This summit will largely boost the development of Chinese polysilicon and photovoltaic industry. In addition, Mr. Fu Xu said that CNCIC will continue to provide efficient information services to push forward the development of polysilicon and photovoltaic industries. Mr. Wu Dacheng made an in-depth and detailed analysis on the key existing issues and the prospect of the development of Chinese polysilicon and photovoltaic industries, reviewed the development of photovoltaic industry in Europe and Japan. In allusion to the booming global photovoltaic market, Mr. Wu pointed out that polysilicon products have a sound market prospect, and this leds to the passion of investment in China, however, the effective development approach is to further reduce the cost of materials by technology breakthroughs.

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News Flash Donghai Silicon Material Industrial Base reviewed and approved under the “Torch Program” Donghai Silicon Material Industrial Base as part of the national Torch Program has recently been successfully reviewed and approved to become the first statelevel industrial base in Jiangsu province, also a high-tech industrial base as a key project supported by Jiangsu provincial government’s 10th and 11th fiveyear plans. This base will be committed to greater technical innovation and collaboration among industry,

academia and research community in order to facilitate strategic transition of silicon industry from imitation and primary processing to innovation and deep processing. It is said this base has formed six industrial complexes, namely, high-quality quartz glass products and quartz glass materials, highpurity quartz powder materials, new-type electric light source and its key materials, high-purity piezoelectric crystal and components, semiconductor and ICrelated materials and PV materials. Currently, there are three key Torch Program high-tech companies and 22 provincial-level hightech companies in the base, with 21 national Torch Program projects and 47 provincial-level key technology development projects or Torch Program projects implemented or underway.

Sichuan BioMax Si&F New Material new producing line started to build In the morning of 18th Dec, Guangzhou BioMax Si&F New Material’s new producing line foundation stone laying ceremony was held in Chenguang Hi-tech area of Sichuan Province. BioMax Si&F New Material is not only the first intellectual property protection pilot enterprise of Guangdong Province, but also a high-tech enterprise, which is engaged in fine chemicals of silicone fluoride research, production, sales and technical services, etc.. The company self developed organic silicon fluoride materials used as cable accessories are gained the national science and technology SME Technology Innovation Fund. The organic silicon fluroride materials produced by Si&F are

Dec. 25th, 2010

successfully used in many advanced fields, such as the national defense industry, aerospace and so on. Recently, Sichuan BioMax Si&F New Material started to build a producing line in Fushun county, Sichuan Province, enhance the feature and promote the development of Chenguang Hi-tech Industry Zone.

1st state-level silicone corporate technical center set up December 14, the state-level corporate technical center of Jiangxi Xinghuo Silicone Plant was inaugurated at Yongxiu Xinghuo Industrial Park. After one year’s construction, the center has been examined and approved jointly by five ministries or committees including National Development and Reform Committee (NDRC) and Ministry of Finance and was granted the plaque, thus becoming the first state-level corporate technical center in China’s silicone industry. With this center in place, Xinghuo will intensify efforts to develop new silicone products and technology. The center will make the plant more technologically capable at an accelerated speed with the help of the preferential policies. Xinghuo currently has silicone monomer production capacity of 200,000 t/a, over 40% of the national total, holding 20-odd patented technologies. The average market share of the plant’s silicone products at home has long been above 19%, with DMC and RTV boasting a market share of 42% and 61% respectively. A 8-billion Yuan plant expansion and renovation project of Xinghuo kicked off in last August. Along with the rapid development of the plant, 20 silicone dounstream producers gather in Xinghuo Industrial Park, producing over 50 downstream silicone products. Once built in place, this park will become the world’s largest silicone producing center with silicone monomer producting capacity of 700kt/a. The plant’s leadership said development of new products and technologies will be their greatest driving force in the future.

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GCL-Poly increases polysilicon capacity and expands investment in Suzhou December 6, GCL-Poly Ltd. held a ceremony in Suzhou to celebrate the full-scale operation of its 3.5GW silicon water plant. November 30, the 3.5GW silicon water plant achieved fullscale operation one month ahead as the 600MW first phase of the silicon water plant hit the production output target. Meanwhile, the 3.5GW casting capacity also hit the output target at the end of November, thus fully realizing matching growth of casting and slicing capacity. GCL president Zhu Gongshan said on December 7 that the rapidly decreased cost of supply chain of solar energy industry is sufficient to withstand the impact from the reduced government subsidies worldwide and that there still will be 20,000 MW demand worldwide in 2011, calling upon governments to allow silicon companies grace period and elbowroom while cutting the government subsidy in order to achieve a win-win situation.

LDK polysilicon capacity exceeds 10,000 t/a November 28, LDK Solar Co., Ltd. held a ceremony to celebrate the successful operation of the second production line of the 15,000t/a polysilicon project, announcing that the company’s polysilicon capacity of over 10,000 t/ a will greatly address the serious undersupply of silicon materials in China at present. Through three months’ painstaking efforts, the second production line of LDK’s 15,000t/a polysilicon plant successfully reached the design capacity of 5,000t/a, bringing the total capacity of two LDK polysilicon plants to 11,000t/a. Started in

Guifeng to commission phase Ⅱ silicone monomer project next spring Recently, Luzhou North Chemical Industry Co., Ltd. announced that the 70,000 t/a second phase of a 100,000 t/a silicone monomer project of Sichuan Guifeng Silicone Material Co., Ltd, one of its majority-owned companies, had been well underway since its commencement on this June and expected to be comissioning next March. The 30,000t/a first phase of this project and associated 30,000t/a ionic membrane caustic soda production line have been put into operation last April. The second phase, consisting of a 70,000t/a silicone monomer production line started this June, is expected to create an

Dec. 25th, 2010

2008, the 15,000t/a project involves optimization and improvement of the modified Siemens process, reaching the world-leading level in terms of single furnace output and average power consumption thanks to the use of the world’s best-designed reducing furnace production system. In addition, LDK announced on Dec. 8, 2010 that the company had executed a two-year silicon wafer and polysilicon supply contract with Shanxi Lu’an Solar Technology Co., Ltd whereby the company will supply 120MW silicon wafer to Lu’an by the end of 2012 and 2,000 tons polysilicon to Lu’an before February 2013.

additional annual sales revenue of approximately 1 billion Yuan once in operation.

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China export tariff rate for silicon metal remains at 15% December 14, the Ministry of Finance published the Tariff Implementation Plan 2011 on its website, indicating that the export tariff rate for silicon metal with silicon content of less than 99.99% by weight will remain at 15% in 2011. Industry players believe this decision is intending to prevent extractive products from draining off and to meet the needs for energy conservation and emission reduction. For China’s silicon metal industry, meeting the domestic demand, increasing the demand along the value chain and curbing the massive export will be the top priorities. Meanwhile, the current tariff rate does not mean there is no possibility of tariff increase in the future. After the export rebate for was revoked in May 2005, the Chinese government increased the export

tariff rate in January and December 2008 respectively, to a level of 15% that remains to date. These increases might cause extra marketing burden to Chinese producers in the short term. In the long run, it will contribute to healthy development of the industry, bringing Chinese market more in line with European and American counterparts. Despite the relatively high tariff, the Chinamade silicon metal products are still the lowest-priced in the international marketplace. It is said that the increase will cause the greatest impact on Japanese buyers. Moreover, the relatively high export tariff rate on China-made silicon metal, coupled with the higher antidumping tax imposed by the EU and the US, caused the market share of Chinamade silicon metal in the EU and US markets to shrink in the short

term and at the same time pushed the price up of silicon metal in the European and American markets, resulting in slight undersupply. Based on analysis on the downstream demand of silicon metal worldwide, 40%-50% is currently used in production of aluminum alloy, 20% in polysilicon and 30% in silicone market, with a small portion used in flameproof materials. According to survey, the PV whole market size will still reach 19-20GW next year, growing at a rate of about 20%, although the demand from Germany, consumer of the half of the global supply, will reduce. Silicon metal is used as the basic material of crystalline silicon, and the rapid development of photovoltaic industry has led to the fast growth of polysilicon and even the whole silicon industry.

Wuhan University New Material Co.,Ltd.(WD Silicone) Tel:86-27-87215023 87214371

Dec. 25th, 2010

Fax:86-27-68754159

E-mail:[email protected](Asia)

[email protected](Europe)

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CAFSI elects its 6th leadership December 9, China Association of Fluorine and Silicone Industry

Mr. Gang Ji, the general director of the association

Mr. Fangming Ge, the secretary general of the association

(CAFSI) held its 6th general meeting and the first plenary session of its 6th directorate in Xi’an city of Shanxi province, where 87 corporate members of its 6th directorate, 32 executive committee members, ten deputy director general, a secretary general and a director general were elected. Mr. Gang Ji was elected the director general of the 6th directorate and Mr. Fangming Ge the secretary general of the association.

Sanyou Chemical’s 60,000t/a silicone project commissioned Tangshan Sanyou Chemical Industries Co., Ltd. announced on 6th Dec. that the company’s 60,000t/a silicone project financed by public issuance of additional shares in 2008 was successfully put into operation after final test and commissioning, producing products that are the industry leading in terms of major economic and technical indicators. The plant has now reached design capacity and operates stably.

Tension on the Korean Peninsular affects export of South Korea The stalemate between the two Koreas that has been lasting for two weeks heats the polysilicon market that should otherwise have been in its slack season. Many photovoltaic industry participarts confirmed that many South Korean polysilicon makers including OCI are unable to export their products as scheduled due to the offshore military exercise of South Korea that followed the deteriorating confrontation between the two Koreas. Meanwhile, some of polysilicon brokers including Japan began buying up the products in the spot market, jacking up the polysilicon price in the customarily slack season. OCI currently is one of the world’s five largest polysilicon makers, with supply expected to reach 15,000 tons in 2010. The company has signed supply contracts with many solar silicon wafer makers and solar cell makers worldwide since 2007, including Evergreen Solar, DeutscheSolar and Suntech. Given the size of its new construction projects, OCI will become one of the world’s three largest polysilicon makers in 2011. There

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are many other South Korean companies including KAM and HankookSilicon, which are also affected by the tension on Korean peninsular. Industry players said polysilicon price in China would normally drop in winter because 90% of Chinamade photovoltaic products are exported to Europe where winter is a slack season, but “this year’s situation is quite abnormal.” Currently, the polysilicon price in spot market at home is between RMB700,000/t and RMB740,000/t, a slight increase over RMB650,000/t to RMB720,000/t at the end of November. The polysilicon price remains firm mainly for the following three reasons: first, some Taiwanese makers turned to the mainland for purchase of polysilicon immediately after the outbreak of political stalemate on the Korean peninsular; second, polysilicon plants head for the downstream as mainland Chinese manufacturers expand their solar cell and module capacities, causing the unbalance between polysilicon supply and downstream demand; third, some of Japanese

traders have began cornering the market in the hope of making profits out of the rising polysilicon price. “Although European countries like Germany reduced their government subsidy for photovoltaic industry, the cuts caused limited impact on the growth of photovoltaic market because the price of photovoltaic module drops faster. Coupled with the startup of Chinese, US and Japanese markets, the polysilicon price will remain firm next year,” said an industry players.

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“Golden Sun”boosting the Chinese PV market On 2nd Dec., the ministry of finance, ministry of science, housing and urban affairs, National energy bureau jointly held a conference in Beijing, to organize, mobilize and arrange the implement of Golden sun demonstration project and the Solar PV building application demonstration project. The 13 of first batch solar PV power demonstration areas are announced on this conference. It also announced that all these demonstration areas completed in 2009 or 2010, will be further expanded according to the local conditions and to build a steady, growing domestic PV market. In 2011, it is expected that the domestic PV capacity will breakthrough 1GW. From the international market, 1GW is the indication marks of PV large-scale production. The launch is close at hand and the Feed-in Tariffs is also

around the corner. At the conference, it is specially emphasized on the government to enlarge the support to these demonstration projects and the China government will give 50% bid price subsidy of the key equipment and RMB4/Watt or RMB6/Watt will be given to other cost according to the type difference. On Nov 2010, the ministry of finance has announced 120 of Golden sun and solar PV building application demonstration projects, with the total capacity of 272MW. Before the Feed –In Tariffs introduced, the ministry of finance will continue to increase the demonstration projects in the form of giving subsidies. It is specially emphasized that to ensure the grid operation, National Grid will further standardize and simplify the program of grid.

Although there is still no legal documents on the PV grid issues, the government will progressively formulate the norms and solve the PV grid issues. The government appealed to increase the application of new products and new technologies, to promote the industrialization of scientific achievement and to achieve the “grid parity”earlier. The “golden sun”demonstration project is a state policy to promote the domestic PV industry development and technological progress. The project mainly aims at the economic development zones and utilizes the construction of industrial roof to expand the domestic PV solar application scale and open up a replicable, sustainable and winwin development path.

CRCSI providing: EPCM package, Advanced poly process package, Consultation and evaluation on technique of TCS synthesis, reduction, hydrogenation, tail gas recovery, etc.

For inquiry, please contact Judy An on: Email:[email protected] Tel:+86-10-64435260 Fax:+86-10-6444036-893 Dec. 25th, 2010

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Dow Corning’s China Business & Technology Center to focus on sustainable innovations On Dec 20th,Dow Corning Corporation officially opened its US$50 million China Business and Technology Centre in Shanghai. Under the legal name of Dow Corning (China) Holding Co., Ltd., the Business and Technology Center is located in the heart of Zhangjiang Hi-Tech Park of Pudong New Area. The Center integrates a cuttingedge research and development facility with Dow Corning’s Greater China Headquarter offices to enhance the company’s innovation capability and better position the company for further growth in China. “Innovation has been the key to Dow Corning’s success. With the installation of state-of-the-art technology and development facilities, the new China Business and Technology Center will significantly spur Dow Corning’s innovation abilities and better facilitate the company’s sustainable development strategy in China and globally. ” said Jeremy Burks, Greater China President, Dow Corning Corporation, “Today’s China Business and Technology Center opening is another demonstration of the company’s commitment to enhancing its innovation efforts to better serve customers in China and the Asia region.” The Business and Technology Center will be able to take advan-

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tage of the reliable supply of basic materials from the Zhangjiagang Site and the ability of the Songjiang Site to manufacture newlydeveloped finished products to meet demands across a range of markets. Together, these sites will create new applications and solutions for China’s fastest growing industries such as solar power, wind, construction and infrastructure development, automotive and transportation, IT/electronics, and beauty and personal care. Together, Dow Corning is well positioned to meet the needs of our customers in China and Asia. “The China Business and Technology Center is a seamless part of our global organization.” said Gregg Zank, Senior Vice President and Chief Technology Officer, Dow Corning Corporation. “Working together with the manufacturing and research & development capabilities in Japan, Korea, Europe and also USA, the new Center is able to leverage our global resources for synergies that create new solutions and products, not only

for the Chinese customers here, but also for the regional and global customers. We innovate here in China, but for the global markets.” This Business and Technology Center will house more than 400 scientists, engineers, marketing and sales and business support professionals initially and will add more than 100 new positions in the near future. “China offers a large pool of high profile local talent. With the launch of the China Business and Technology Center, we are able to make the best use of this talent pool and develop more advanced products and sustainable solutions. ” said Zank. The center will also provide a new platform for in-depth cooperation and collaboration between the company and Chinese universities and scientists. “We believe that by consolidating this caliber of talent in one center, we can shorten the innovation cycle that turns market opportunities and new ideas into profitable solutions, thus better serving our customers in China and also in Asia,” said Zank.

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Interview How vacuum solutions are helping to reduce costs in silicon manufacturing Hello, Mr. Widl, thanks for your attending. And could you please give a brief introduction on what kind of products is your company supplying to the PV industry?

Mr. Andreas Widl, CEO of Oerlikon Leybold Vacuum GmbH

Thank you very much for offering me a chance to deliver a speech on the 3rd polysilicon and PV industry summit. Oerlikon is a company with long history. There are six segments of Oerlikon and actually three segments are delivering the products to the solar industry. One segment is Oerlikon Leybold Vacuum where I am the CEO of. We provide all kinds of vacuum technologies for the silicon dust industry, solar industry and specifically regarding your question this is pretty much for providing dry pumps for the polysilicon process and area, high vacuum pumps for the thin film process as well as group pumps for the elimination process. We have another group within the Oerlikon company which is called Oerlikon Systems.

And then you might think of the third segment just called Oerlikon Solar. This is company which is providing full line solutions for thin film and silicon solar applications. What’s your view on the development of PV industry in future? I think from the presentations I have seen the data proves that there is a growth and there is a lot potential. But the solar industry has to grow up and “Grid Parity” is a must. So whatever technology you use, you must be sure you are competitive and you have to compete with the general energy solutions. And for our company, Oerlikon will help you to reduce the cost of production. That means to reduce the cost of the modules. So I see growth but it is mandatory that the devices are getting cheaper. And my company are demonstrating that our products are contributing to reduce the cost of modules and in order to reach the “Grid Parity”.

Lowering the cost of polysilicon manufacturing Hello, Mr. Servini, could you tell what does the PV industry look like in your opinion? Well, the PV industry is certainly a fast growing industry with enormous potential. The direction of this industry seems need to be that of high efficiency cells. So the future of this industry might be high efficiency cells that generating most power per square meter of our products. Adrian Servini, Business Director of GT Solar

Dec. 25th, 2010

Under these trends, how is the polysilicon to meet these high

efficiency requirements? The high efficiency cells require high quality polysilicon product. The future of the polysilicon industry is that it will be for high quality polysilicon but we should never forget the importance of the cost. The way to do that is large factories. The poly industry is going to be dominated by some large companies which can afford qualified technical people. These technical people can keep the quality under control and moving constantly forward.

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Application of FBR technology Would you please introduce the advantage of Suntek FBR technology? Suntek was established in 2002 in the US and has been tracing various polysilicon production technologies since 2004, where we find that in terms of polysilicon manufacturing technology, the most major progress was made at the first US energy crisis in the 1970s and 1980s, when the US government, enterprises and research institutions jointly developed dozens of polysilicon production methods. After careful classification and comparison, we finally confirmed that the silane FBR technology boasts many advantages. There are briefly five advantages: the first is simple process route; the second is less floor area, only one fifth of Siemens process; the third is smaller energy consumption for reduction; the fourth is strong downstream applicability, especially for large-scale PV industry application; the fifth is low total cost. By far, the technology is up-to-date and there are foreign companies applying this method. How to integrate the FBR into current Siemens process? Presently, dozens of polysilicon enterprises started up in China are mostly using modified Siemens process, featuring high energy consumption and cost. I find that though foreign technology developers have developed the thirdgeneration technology and make actively popularization, while their first-generation technology has not manufactured acceptable polysilicon products, which is really a pity. Aiming at this, our FBR technology matches well with Siemens process. The first step is hydrogena-

Dec. 25th, 2010

tion of silicon tetrachloride, which is tough for many enterprises. After the issuance of No.38 Document by the State Council, we started up three projects in China, which annually treat 200,000 tons of silicon tetrachloride, and produce 10,000 tons of polysilicon at phase I and 60,000 tons for phase II after full operation, and we are also getting in touch with other companies, so the first step of our process is to solve the problem of by-product; the second step is to integrate FBR on the basis of current process, since the process of FBR for producing granular polysilicon has many unique features and is a great innovation of manufacturing technology, with capacity more than 1000 tons, and may also produce trichlorosilane and silane concurrently; third, the characteristics including low energy consumption and small operation space, good stability and convenience for longtime operation, are all taken into consideration from pilot plant test to final design. You may doubt stable operation of FBR in large-scale application. Conversely, large size of reactor is favorable, since the larger the size, the easier the reaction will be. Another point is that people think safety should be considered since silane is a hazarobus gas, and during the Great Cultural Revolution, silane accidents occurred, but it was caused by small size and outdated technology. In fact, silane leaks into air will not accumulate but combust and spray flames, which may be discovered in a timely manner. The only case is if silane accumulated in large quantity and released in very short time, it will be dangerous, but the case seldom takes place. I person-

Sunnyside Technologies, Inc General manager, Mr. Steve Chu

ally believe that the safety of silane is under control. On this Polysilicon & PV Summit, since people all focus on low cost and high purity, can the technology of your company meet such need? In terms of quality advantage, the purity of silane is high, the polysilicon produced can’t be contaminated by other impurities, the characteristic of fluidized bed is that the product will contact with the inner wall of reactor, but the inner wall is updated with high purity, so there is no contamination; during subsequent processing, since the surface area of granular polysilicon is large, if processed improperly, product purity will be affected, but in modern process, products are directly packaged into downstream application for continuous ingot casting or crystal pulling, so the quality requirement can be guaranteed.

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Globe leading solar PV company via sustainable profitable growth As we all know that OCI is the first company to win the green certification in Korea. Is that one example that OCI is contributing to the sustainable development? Will you please give us more on this issue?

Mr. Taehyeon Kim, Senior manager of OCI Company Ltd.

OCI has a long history around 50 years. It is more helpful to make these sustainable developments and also the subsidy of OCI materials. We just make monosilane gas and TCS gas which are low cost material to make polysilicon. I think two things: long history of chemical basis company and basic technology of making TCS gas. They are good examples to the sustainable development of OCI. Through more than 50 years efforts, OCI is the third largest polysilicon producer. How could your company make such great achievements? OCI is the third largest polysilicon producer till 2010 in worldwide. But we will be No. 1 with a capacity of 62kt in 2012, according the strong decision of the com-

Dec. 25th, 2010

pany’s management. At the moment, OCI is contributing a new 20,000t/a P4 polysilion plant, with the investment of about USD1.6 billion. This plant is started to contribute at Dec 2010 and estimated to complete by Oct 2012. Another reason is we started the 5,000mt/a in our first plant. Through that, we got good and strong confidence to make good quality and low cost product. What’s your plan in next 3-5 years? To keep the No.1 position, we have to think about what is our strategy for this near future. First of all, we will be the market leadership in both quality and quantity. Eventhough nobody knows the future, we will keep at least 20% of market share worldwide. Right now, I could not say the current cost of polysilicon but our target is US$25/kg. We will keep moving to get this target. Last one is the technical team. At our sites, we have a qualified technical team to get more nice technology to keep quality and quantity of our products.

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Third generation Siemens process is here: ultra-pure polysilicon at $19/kg What does LXE do? LXE provides technology to the polysilicon industry for the production of pure TCS and mono-silane for electronic gas sales. LXE also brings cost reduction technologies to existing plants; for example, LXE’s new, Advanced Off-Gas System will reduce cost of manufacture and capital cost, and is perfect for use at STC hydrochlorination plants. Finally, LXE is affiliated with qualified equipment fabricators and engineering firms who can efficiently and cost effectively implement its designs. How is LXE different from other technology providers? LXE is a pure-play technology provider. We are not a technology provider who is trying to becomes an equipment provider, nor an equipment provider who is trying to become a technology provider. LXE is differentiated from most if not all other providers by its commitment to internally developing new technologies bringing low-low cost and ultra-high purity. LXE is opening new markets in China by partnering with producers wanting to get into mono-silane electronic gas sales. What do you mean by “new markets”? LXE is building a regional sized mono-silane production unit at the Orisi Silicon plant-site in Inner Mongolia. LXE’s sourcing of bestin-class mono-silane production technology will facilitate the domestic growth of this industry. You introduced Generation 3 technology at the conference. Do you think Generation 3 is a

Dec. 25th, 2010

break-through technology and why, and what type of response did you get? We have received an overwhelmingly positive response. LXE’s Generation 3 Polysilicon Process will fundamentally change the way TCS and polysilicon is made. It solves the two greatest technical and business issues faced by Chinese polysilicon producers today: cost and quality. Generation 3 produces ultra-pure $19/kg polysilicon. Cost of manufacture and capital costs are reduced by 40% to 50% each. Purity is 100 times better than with current direct chlorination or STC hydrochlorination processes.

LXE, Executive director, Mr. Mark Dassel

What are your next steps in Generation 3 development, and when will you bring Generation 3 to the market? LXE has completed all necessary lab tests in the continuous reaction facility located at its Seattle R&D Center. We are currently designing and building a fully integrated pilot-plant. And we believe the market release will be in 3Q 2011. When can people come to see LXE’s Generation 3 technology?

Where do you see LXE in the future?

People can come now. We invite qualified visitors to visit our Seattle R&D Center for comprehensive due-diligence review and lab oratory demonstrations.

I see LXE as the pre-eminent supplier of break-through technology resulting in low-low cost and ultra-pure polysilicon. Ultra-pure polysilicon is the market need of the future. Firms providing such will command premium prices for their product. LXE, together with other far-sighted firms in downstream PV packaging, will catalyze the growth of the photo-voltaic industry for the foreseeable future.

Do you have a patent estate? Yes. LXE has a very comprehensive patent estate and has filed in all Patent Cooperation Treaty countries, as well as certain incountry filings.

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Conference Paper

Situation of Chinese Polysilicon and PV market Mr. Wu Dacheng, Vice director of China Photovoltaic Society

PV value chain and incentive policies Polysilicon is the main raw material for producing solar cell and the significant part in the whole PV value chain, which involve polysilicon, wafer processing, solar cell production, PV module encapsulation and solar power generation system. At the moment, the crystalline silicon cell is the mainstream of PV production and the solar grade silicon material is the important part in the PV value chain. Therefore, the rapid expansion of the PV application market drives the demand of solar grade polysilicon. Due to the economy barriers, China’s application of solar cell developed quite slowly and the PV market was limited at the beginning. In recent years, governments have adopted a series of incentive policies on PV industry to bring down the price of PV products, to make it more competitive, which is also promoting the world PV industry development. However, the current PV market is still a government support and policy incentives needed industry. Different countries adopt different policy incentives,

Dec. 25th, 2010

such as Feed-in Tariffs, Net metering method, Quota system, etc.. The Feed-in Tariffs, presented by the U.S. and first used by Germany, is considered the most scientific method at the moment. It has greatly promoted the German PV market, as well as the world PV market. Currently, there are over 40 countries, including Germany, Spain, etc., adopting the Feedin Tariffs. Some countries, such as Japan and the U.S., adopt the method of net metering, coordinated by the related the government subsidy policies. At the moment, there are about 42 states of U.S. using this method. The renewable energy quota system is a kind of support to different types of renewable energy. This policy is not specified for the PV industry, Table 1. Status of PV industry in rapidly developed countries and regions Countries Policy Products Industry Market Cost Potential /region EU

Strong Strong

Strong Strong High

Fair

Japan

Fair

Strong

Strong

Fair

High

Fair

US

Fair

Strong

Fair

Fair

Fair

Large

China

Fair

Fair

Strong Weak Fair

Large

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so that its support is not that large. The countries, such as U.K., Australia, are using this policy. Qualitative comparison for the status of the PV industry rapid developed countries and regions is shown in table 1. All the emerging photovoltaic markets involving South Korea, Italy, France, Australia, U.E.A, India, etc., implemented the Feed-in Tariffs. And the greater application of PV market in China is also being launched.

Global PV industry In recent years, gloable PV industry has been developing at a high speed, with the highest annual growth rate of 60%-70%, even the lowest one reached 20%-30%. However, the main growth is centralized in Europe, Japan, the United States and other developed countries. The German PV industry has developed fast and stably, thanks to the implement of Feed-in Tariffs. However, considering the industrial restructuring, industry insiders estimated the installations may increase in Germany next year. Throughout the PV industry in Spain in recent years, an extremely increase presented in 2008, thanks to the relaxed policies and the rich resources. However, it dropped significantly in 2009, after a government adjustment measures implemented for inhibiting the fast increasing. In 2009, the installation in Germany and other countries of E.U. kept a high growth trend, even though experienced the financial crisis. In Japan, the installation declined to some extent in 2008 after the roof scheme completed to implement, nevertheless, it recovered after the financial crisis. Regarding to the U.S., its amount is not that much, however, the trend is keeping increasing.

Fig. 1 Installation in main PV markets 2007~2012

Development of Chinese PV industry Chinese PV industry started relatively early, with the government support mainly focused

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Annual installation

Cumulative installaion

Fig.2 Annual and cumulative installed capacity of China during 1990 ~2009

on R&D in previous years, and the market were more dependent on its natural development. In recent years, as the global PV industry development, China’s PV market has increased year by year. The base of Chinese PV market is relatively low, with the installed capacity of around 300MW before 2009, only occupied about 1% of global installed capacity. However, Chinese new installation reached 160MW in 2009, excess the total installation during 1979 - 2008. The annual and cumulative installed capacity in China between 1990 and 2009 are shown in Fig.2.

Development of solar cell manufacturing The shipment of world main solar cell producing countries and regions in 2009 is shown in Table 2. Table 2. Shipment of world main solar cell producing countries and regions in 2009 (MW) China Europe Japan

Taiwan China

USA Other

Total

4,000.0 2,800.0 1,800.0 1,000.0 600.0 500.0 10,700.0

The current solar cell industry is in a rising stage and the semi-finished products or stocks are constantly increasing, so that the shipment is greater than the installation. In 2009, the world solar cell shipment reached 10.7GW, with the installation of only around 7.6GW. At present, about hundreds of companies in China are producing the solar cells, and some of them have been among the forefront of the world’s solar companies. The world top ten solar cell producing companies are shown in table 3. In 2009, Chinese enterprises occupied 4 seats in the top ten global solar cell enterprises. It is expected that, by the end of 2010, the output of Suntech will reach 1.5GW, Yingli and JA will exceed 1.2GW, and some other Chinese companies will sprint 1GW. In recent

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Table3. World top ten solar cell producers and their output in 2009 Rank

Company

Output, MWp

1

First Solar

1019

2

Suntech

704

3

Sharp

595

4

Q-cell

537

5

Yingli

525

6

JA Solar

509

7

Kycera

400

8

Trina Solar

399

9

Sun Power

398

10

Gintech

368

Fig.2 World polysilicon producing situation 2004~2010

Table 5. Production situation of Chinese key polysilicon producers in 2010 Province Sichuan Sichuan Sichuan

Table4. World and Chinese solar cell production and their market share Year

2007

2008

2009

2010(E) 2011(E)

World solar cell production 4,000 7,900 10,660 (MW)

15,000

Chinese solar cell production 1,088 2,600 (MW)

8,000

Share (%)

27.20 32.91

4,011 37.63

20,500

Sichuan Sichuan Sichuan

53.33

13,000 65

year, the output of solar cell in China and the world total are shown in table 4. By the end of 2010, Chinese solar cell production will be up to half of the world total, and be the main solar cell producing country in the world. According the current situation of installation, Chinese domestic solar cell production will occupy up to 60% of the world total.

Situation of Chinese polysilicon production The output of the solar cell production mentioned above involved both crystalline silicon cell and thin film cell. In recent years, the proportion of the thin film solar cell has increased, and reached 18.59% in 2009. The amount of polysilicon is closely related to the crystalline silicon cell production. The world polysilicon production in recent years is shown in Fig.2. As shown in Fig.3, the production of electronic-grade polysilicon remained at 20-30kt,

Dec. 25th, 2010

Sichuan

Company Xinguang Silicon Co., Ltd. Sichuan Yongxiang Co., Ltd. Emei Semiconductor Materials Plant Yaan YongWang Silicon Industry Co., Ltd. Sichuan Renesola Silicon Material Co., Ltd. Tian Wei Sichuan Silicon Co., Ltd. Leshan Ledian Tianwei Silicon Co., Ltd.

Output Capacity Capacity utilization (t) (t/a) (%) 1,000

1,000

100

850

1,000

85

1,200

2,200

55

660

1,500

44

1,300

3,000

43

1,500

1,500

100

1,700

3,000

57

17,000 18,000

89

Jiangsu

GCL

Jiangsu

Yangzhou Shunda 1,500 Silicon Co., Ltd.

1,500

100

Jiangsu

Wuxi Zhongcai

800

1,200

67

4,000

5,000

86

800

1,250

64

Chongqing Daquan

3,680

4,300

86

Hubei

Yichang CSG Polysilicon Co., Ltd.

1,400

1,500

93

Jiangxi

LDK

4,000

6,000

67

1,500

5,000

40

42,890 56,950

75

Henan Shanxi Chongqing

Others Total

China Silicon Corporation Co., Ltd. Shanxi Tianhong Silicon Material Co., Ltd.

with slightly changed. However, the growth rate of solar-grade polysilicon and growth trend similar to the overall production. It can be seen that the substantial growth in demand for solar grade polysilicon has been stimulating the total polysilicon production. Including the loss, the polysilicon consumption of Chinese solar cell manufacturers is above 57,640t in 2010,

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calculated as the consumption of 8t polysilicon per MWp cell production. It is estimated that Chinese mainland demand of polysilicon will reach 100kt in 2011. In 2010, China’s domestic polysilicon production was 42,890t, but the actual demand was 70,000t so the gap between demand and supply was 27,110t and the gap account for 38.7%. If China’s polysilicon production capacity is estimated as 10 tons and the average capacity utilization is 70% in 2011, China’s polysilicon production will reach 70,000t. And then the actual demand will reach 100,000t, so the gap is still 33.3%. According to the statistics of CRCSI, from January to October, China’s actual import of polysilicon was 35,000t. However, overcapacity in the world’s polysilicon market still exists.

reduce the industry’s dependence on polysilicon. 3. With the release of polysilicon manufacturers’ production capacity, supply and demand between upstream and midstream in photovoltaic value chain will keep a balance in the continued conversion: PV market development needs the further decline in the cost of photovoltaic products. This market demand will be passed to the upstream chain. Thus, highquality, low-cost silicon will gain a competitive advantage. 4. Exports of solar cells made in China account for about 80% of its production, its markets almost entirely in foreign countries. Therefore, how to strengthen the competitiveness of the Chinese industry is an imminent event.

Effect of photovoltaic industry development on China’s polysilicon market

Current situation and problems

1. Solar grade polysilicon market will keep its upward trend: crystalline silicon solar cells will remain as mainstream for a time. While because of the subsidies, the development of PV market may also fluctuate. However, the “Grid parity” approaching makes photovoltaic market in explosive growth. 2. The demand growth rate of solar grade polysilicon will be lower than the rate of PV market: advancement in technology will further reduce consumption of materials (thin films, the emergence of high efficiency crystalline silicon cells will increase the utilization of polysilicon); the proportion of thin film and new cells with other materials is rising, which will

Dec. 25th, 2010

1. From the figures, the global polysilicon production capacity has been a surplus since 2009, but the tensions of polysilicon supply hasn’t been eased. 2. In 2010, the spot price in solar grade polysilicon market rose instead of falling (the domestic prices rise to the present USD90100/kg from USD50-60/kg at the beginning of the year). 3. The high price of polysilicon affected the marketing expectation of the lower component price, and then affected the development pace of the PV market, and will also inhibit the policy oriented market’s demand for polysilicon. 4. The overcapacity situation in upstream and midstream market will definitely appear.

Raw material

Silicon ingot

Casting

PV system

Module

Wafer

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Game between low-cost and high-quality polysilicon technologies CRCSI Linda Qiu

“The 3rd (2010) World Polysilicon & PV Industry Summit” was successfully held during Dec 8-9 in Chengdu. The conference was sponsored by China National Chemical Information Center (CNCIC) and organized by China Research Center of Silicon Industry (CRCSI). The summit attracted a total of over 260 participants from the USA, Norway, Japan, South Korea, Germany, Spain, India, Taiwan and the mainland China. The speakers are all the senior management form the leader companies of the world polysilicon industry, such as GCL, Centrotherm, OCI, Xinguang Silicon, etc.. From their reports, we can catch the latest movement of the world polysilicon and PV industries, also we recognized the market trend more clearly. Their reports reflected the high quality polysilicon would still boast main market share in the PV industry. Meanwhile, these top companies had made a series of cost reduction exploration.

What’re leading technologies

Table 1 Comparison among modified Siemens process, silane process and fluidized-bed process TCS Hydrochlorination / Siemens CVD

Silane Silane Hydrochlorination Hydrochlorination / Siemens CVD / FBR CVD

CAPEX

BETTER

WORSE

BEST

HIGHEST QUALITY

ELECTRONIC

HIGHEST ELECTRONIC

SOLAR

EASE OF OPERATION

VERY GOOD

GOOD

BEST (SHOULD BE)

CVD POWER CONSUMPTION

BETTER (35-120 kWh/kg)

GOOD (40-120 kWh/kg)

BEST (10-15 kWh/kg)

POWER CONSUMPTION (MG Si to E.G POLYSILICON)

BEST (70-155 kWh/kg)

WORSE (90-115 kWh/kg)

BEST (70-90 kWh/kg)

O &M STAFF

HIGHER

HIGHER

LOWER

ROBUST PROCESS

GOOD

GOOD

BETTER

R&D REQUIRED

NO

SOME

SOME

RISK

LOW

HIGHER

HIGHER

Source: Report of Mr. Russ Hamilton of GCL The current chemical technologies for polysilicon production mainly include modified Siemens process, silane competitions and emerging new technologies. process and fluidized-bed process. A technology has to • Fit your Business Plan; and meet the following conditions if it expects to become the • Low Operating Cost with Highest Quality; and leader in the polysilicon industry with increasingly severe • Safe, Environmentally Sound and Reliable

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Operation; and • Overall Facility Integrated Processes for Lowest Energy Consumption and Maximum Waste Recovery; and • Capable of Under $20/kg Fully Loaded Cost; and • Have Access to Competitive Raw Materials and Labor; and • Need Low CAPEX Facility Cost; and • Remember there are a few best technologies but lots of mistakes available to select from.

Technical genre LXE Solar owns the state-of-the-art polysilicon process technology including hydrochlo rination, and its technical team is composed of experts specialized in process design, plant commissioning and startup, plant integration and fundamental work. At the summit, LXE proposed G3 high-purity polysilicon technology (manufacturing cost: $19/Kg) which attracted extensive concerns in the industry for its world leading level. The G3 Siemens process developed by LXE is shown in Fig 1. This technology is composed of four equipment blocks: 1. MG-Si converted to ultra-pure mono-silane gas 2. Mono-silane converted to TCS in one reaction step 3. TCS converted to polysilicon in standard Siemens reactor

4. Advanced CVD off-gas system: • HCl converted to TCS • No refrigeration required Mr. Mark Dassel, executive director of LXE said that LXE’s technology is capable to reduce manufacturing cost and investment cost by 40% and 50% respectively, 100 times purer compared with STC hydrochlori hatior. At present, LXE is cooperating with Shenzhou Silicons to construct a mono-silane production project, the first mono-silane plant in China. Mr. Steve Chu, General Manager with Suntek, said that fluidized-bed technology is applicable to largescale solar grade polysilicon production, and it’s an inevitable choice in terms of either cost or downstream industrial application. Suntek Co., Ltd. was established in the USA in 2002, and it launched research and category comparison of various polysilicon technologies since 2004, and finally confirmed that fluidized-bed technology has many advantages and is a leading technology. The advantages of fluidized-bed process include: firstly, the technical routine is simple, the latest at present; secondly, less land occupation, 1/5 of that of Siemens process; thirdly, less energy consumption of reduction; fourthly, extensive downstream application, especially large-scale application in the photovoltaic industry; fifthly, low combined cost. In allusion to the risk in silane production concerned in the industry, Mr. Chu Xi said that the safety of silane production is under control. Silane is a hazardous gas, and its safety must be taken into account. There were silane accidents during the Cultural Revolution, but the scale was relatively small, and those were caused by lagged technology and other factors. Indeed, silane won’t accumulate when it’s leaked into the air, but it will burn by itself when exposed in the air, and flaming may happen if the quantity is large, and it can be detected in time. The only dangerous circumstance is that a great deal of silane accumulates immediately and releases its energy, but there is few such case. In the view of some enterprises, preparing solargrade polysilicon by metallurgy will become the mainstream technology of photovoltaic industry; compared with other technologies for preparing silicon materials, it has the advantages of low cost, rapid energy recovery and environment-friendly, and there is a huge

Fig. 1 High-purity polysilicon process developed by LXE Quartz, coke++ Electric arc Si furnace

Slag treatment

Sizing and washing

Slag production

Leaching

Solidification

Elkem Solar Silicon®

Quartz, lime, others

Fig. 2 Elkem Solar Silicon® production process

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potential of cost reduction by further process optimization. Elkem is an affiliate to Orkla ASA, the world’s largest silicon metals supplier, boasting over 15% global market share. The company introduced a novel technology, i.e. Elkem Solar Silicon® production process, as shown in Fig 2. Production of 1kg solar silicon consumes only about 40kW electric power. While many enterprises are actively exploring new technologies, Sichuan Xinguang Silicon Technology Development Co., Ltd. is off the beaten track, it proposed a quality control system for polysilicon producTable 2 Xinguang’s detailed rules for quality control during production No.

Supervision item

Sampling frequency

Sample point

1

Liquid chlorine

Each batch

Liquid chlorine tank

2

Silicon powder

Each batch

Silicon powder warehouse

3

Purchased trichlorosilane

Each batch

Material processing procedures

4

Electrolytic hydrogen

Online

Hydrogen workshop

5

Synthetic trichlorosilane

Every Monday, Wednesday and Friday

Synthetic condensate

6

distilled trichlorosilane

Everyday

Synthesis, recycling, hydrogenation distillation columns

7

polysilicon

Each furnace

Polysilicon preparation

8

Recycled hydrogen

Every Monday, Wednesday and Friday

Recovery process

9

filament

Each piece

Filament preparation

10

Product

Each bag

Finishing section

tion by strict regulation of the existing process. The polysilicon project (annual output: 1,260t) to be constructed by Sichuan Xinguang was approved by the State government, and it adopts modified Siemens process. Key technologies of world leading level include: trichlorosilane distillation, large-scale energyefficient reduction furnace, silicon-tetrachloride hydrogenation, dry recovery by reduction of gas emission and other supporting techniques. Mr. Pu Xiaodong from Xinguang Silicon, illustrated the necessity of production quality control for stable, reliable, low-cost and high-quality polysilicon production. Taking Siemens process for an example, the five key factors influencing the quality of polysilicon: refined trichlorosilane, hydrogen, graphite members and other consumables, filament, the environment and furnaces. The detailed rules for quality control are provided in Table 2. At present, Xinguang has passed CQC’s review and inspection on the operation of the quality control system and achieved the certification. Integration of the industry chain is also a key approach to realize high-quality polysilicon production at low cost. The PV value chain can be classified into five sections (listed in an up-down order): silicon materials, silicon ingot and slice, cell, components and system integration, it finally acts on the market end and realizes solar power generation. The core purpose of integration is to strengthen the competitive power and risk-resisting capacity of enterprises. In the summit, Mr. Mozer from Centrotherm introduced the particular model of value chain integration to reduce investment cost, lower operation cost, industrialize the production of high-performance photovoltaic system, and finally control the manufacturing cost below ￡1 /Wp.

Single Factories versus Integrated Factory

Source: Report of Mr. Pu Xiaodong of Xinguang Silicon

Single factories

Polysilicon plant

Ingoting & Wafering

Ingoting

Integrated factory

Solar cell line

Module line + Administration

Wafering Solar cell line Module line

MG Silicon Plant

Solar academy Power plant

Polysilicon plant

Administration

Fig. 3 Integration model of photovoltaic value chain © centrotherm photovoltaics AG

Dec. 25th, 2010

Low cost production: fully integrated c-Si module factory

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Fig 4 Energy consumption of the entire plant where GT's hydrochlorinatior process is adopted

In terms of 1,000t polysilicon factory, it’s a safe, economic and effective approach to transform tetrachlorosilane into trichlorosilane. GT Solar is the leader on the global market of process design and equipment supplier for production of polysilicon and polysilicon ingot. At present, there are 4 hydrochlorinatior plants designed by GT operating in the world, the newgeneration of hydrochlorinatior fluidized-bed are under operation and the conversion efficiency is greater than 27%, with a total energy-consumption of 72kWh/Kg. The advantages (compared with thermal hydrogenation) are shown in Fig. 4, the energy consumption is reduced from 94 kwh/Kg (by thermal hydrogenation) to 72kwh/Kg. In the opinion of Mr. Adrian Servini , bussiness supervisor of GT Solar, hydrochlorinatior will be the choice of polysilicon manufacturers in the future. The reasons that polysilicon manufacturers didn’t choose hydrochlorinatior before 2007 include: the patent of

Dec. 25th, 2010

UCC Company expired in 2004, many companies weren’t able to adopt hydrochlorinatior before 2004; fluidized-bed and other associated equipment use large quantity of special materials with a long delivery period which results in longer time of cold hydrogenation equipment delivery. GT has finished basic design package equivalent to 1,500t, 3,000t, 5,000t and 6,000t factories; in addition, GT provides hydrochlorinatior and other key equipment and corresponding mechanical integration procedures to break the bottleneck of long equipment delivery period. The rapid development of photovoltaic market will drive the growth of market demands of solar polysilicon materials, and technical advance will further reduce consumption of materials (ultra-thin slice and high-efficiency are the development trend of silicon cell), and low-cost and high-quality silicon materials will achieve competitive advantages and become the development trend of polysilicon products.

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Market

An analysis on main photovoltaic industrial parks in China CRCSI Yao Song

Since the opening up and reform, numerous industrial parks have been set up in China. So far, over 30 photovoltaic industrial parks have been established in China, some of which are named geographically such as Shizuishan Photovoltaic Industrial Park and Jinzhou Photovoltaic Industrial Park and some are named after corporate names like Changzhou Tianhe Photovoltaic Industrial Park and Jiangsu Shunda Photovoltaic Industrial Park. Construction of photovoltaic industrial parks and building of industry agglomerates are interrelated and interdependent as the former

Dec. 25th, 2010

is the key to the latter. The previous inter-company competition will gradually evolve into competition among industry agglomerates and among regions, and the upgrading of way of competition requires industries to be constantly consolidated. Although there are a large number of photovoltaic industrial parks, most of these parks accommodate a limited number of companies, with incomplete market system, outdated economic operational mechanism and administration system and inadequate policy of opening to the outside world. Overall, there are many imminent problems

facing these parks.

1. Investment promotion practices need to be innovated Industrial parks have long been utilizing preferential policies (especially taxation policy and land policy) to attract investors. Undeniably, these preferential policies indeed worked in the early days of most industrial parks, but reliance upon preferential policies has been growing and awareness of market mechanism function has been weakened over time. However, benefits of preferential policies are disappearing, partly because do-

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mestic companies are more involved in international competition as the WTO process deepens and partly because fierce competition has brought these preferential policies to the same level. In addition, as the economic system reform and marketization process deepen, land and labor costs are on a steady rise while preferential policies become homogenous or universal. The conventional approach to investment promotion based solely on preferential policies lost its attractiveness to investors and is on its way to extinction. The approach to industry agglomeration and investment promotion practices must be innovated.

2. Unequal development opportunities The different administrative levels of various industrial parks mean the licensing authority and policy entitlements vary considerably from one park to another, providing unequal opportunities of development. Cutthroat competition among industrial parks arose when inappropriate outlook on achievements in official career and departmentalism goes rampant among local governments, resulting in tremendous waste of resources. Meanwhile, performance rating of various industrial parks across the country focuses more on quantitative indicators such as size of investment, output value and export volume than on competitiveness, sustainability and innovation capability and other qualitative indicators, thereby fueling the extensive management of industrial parks.

3. Coordination between industries and environment When it comes to industrial setup, most industrial parks are nearsighted, with little attention paid to the long-term environmental impact of their value chain planning. The consequence is serious environmental pollution. How to strike a balance between construction of industrial parks and environ-

Dec. 25th, 2010

mental stewardship and how to resolve the environmental pollution and ecological damage problems in the process of industrialization and urbanization are issues of immediate concern both at home and abroad.

4. Weak core competitiveness of industrial parks Industrial parks in China have the following main characteristics: first is lack of core competitiveness. Domestic industrial parks introduce focus more on technology introduction than assimilation and more on imitation than creation. The lack of innovation causes photovoltaic industrial parks in the country to fall short of strong competitiveness. Second is that financing becomes a major bottleneck. The reason industrialization of scientific payoffs is difficult is mainly because of lack of funding although institutional and organizational constraints are also problems. Several high-profile polysilicon and photovoltaic industrial parks in the country show bellow Luoyang High-tech Park Luoyang High-tech Park focuses on development of new materials such as crystalline silicon semiconductor materials. In 2009, silicon electronics output value at the park reached 8 billion Yuan. The park has two-prong development strategy for its silicon material industry: solar-grade silicon material value chain consisting of polysilicon ingot castings and slices and electronic-grade silicon material value chain consisting of pulled monocrystalline silicon and slices. Silicon material business in the

park grew rapidly in recent years. Many projects have been planned to develop the silicon business and extend the value chain in the park. Several projects under construction are Zhonggui high-tech silicon material research and development center project, 1,000MW/a solar cell and assembly plant project of Luoyang Sun-tech Power Co., Ltd and 60MW/a photovoltaic silicon chip plant project of Luoyang Hongtai Semiconductor Co., Ltd. Xinyu National Photovoltaic Industrial Base June 2009, the Ministry of Science and Technology officially designated Xinyu city of Jiangxi province as the national center for silicon material manufacturing and industrialization of photovoltaic application, requiring the city government to prioritize production of polysilicon material and chips and facilitate industry agglomeration and improve core competitiveness of local silicon companies by leveraging the existing infrastructure and by tailoring application development to market demand. July 2005, LDK established its presence in Xinyu, followed by a 10 billion Yuan photovoltaic project of Taiwan-based Solartech Energy Ltd. Two other famous solar companies of Taiwan-based Lijin Tech Co., Ltd and Yaohua Electronics Ltd are currently negotiating with the city government on possible implementation of solar energy projects. Business revenue from photovoltaic industry in the city hit 10 billion Yuan in 2008. Statistics show that the photovoltaic industry in the city will achieve production capacities of 80,000 t/a silicon materials, 10,000MW polysilicon chips and 6,000MW downstream photovoltaic products in 2010. Baoding National High-tech Area April 2003, Baoding National High-tech Area was officially designated by the Ministry of Science and Technology as the state-level center for new energy and energy equipment manufacturing industry. Currently, the high-tech area consists of five state-level R&D cen-

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ters and nine provincial-level R&D centers and 25 local corporate technical centers. In 2000, the high-tech area selected a group of innovative companies like Zhonghang Huiteng and Tianwei Yingli as top-priority businesses. In 2002, the high-tech park began building an industrial park centered on new energy and energy equipment manufacturing business through consolidation and reorganization measures. June 8, 2007, Yingli Green Energy Ltd successfully launched its IPO on New York Stock Exchange, thus becoming the first company in Hebei province to go public on the main board in the US. In 2008, the company produced 280MW solar cell assemblies in total, with sales revenue of 8.5 billion Yuan and profits of 1.35 billion Yuan. In 2009, the 500MW third phase of 3 billion-Yuan YGE Industrial Park was fully commissioned, with the fourth phase consisting of a 800MW/a photovoltaic cell plant project and 18000t/a silicon purification plant project well underway. Currently, the high-tech area accommodates crystalline silicon solar cell companies, membrane solar cell companies, photovoltaic control system and reversion system manufacturers, photovoltaic power station system manufacturers, photothermal product manufacturers and LED manufacturers. Leshan High-tech Area With abundant resources and industrial infrastructure, Leshan city government endeavors to build a national center for polysilicon and photovoltaic business, with 1,560t/a polysilicon capacity and 12MW solar assembly capacity in 2007 and actual polysilicon output accounting for 70% of the national total the same year. While a 1,260t/a plant of Xinguang Silicon Co. Ltd in normal operation, a 1,000t/a plant of Tongwei Ltd and a 500t/a polysilicon plant of Dongqi Emei Semiconductor Co., Ltd. were commissioned in 2008. A 3,000t/a polysilicon plant project of Ledian Tianwei Ltd is well underway, while a 1,500t/a plant of Dongqi Emei Semiconductor Co., Ltd. and a

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9,000t/a polysilicon plant of Tongwei Co., Ltd are about to be built. The high-tech area will achieve production capacities of 20,000t/a polysilicon, 2,000t/a monocrystalline silicon, 500MW solar cell and 50 billion pieces of electronic components at the beginning of the 12th five-year plan period within the next three or five years. Shizunshan Photovoltaic Industrial Park Proven silica reserve in Shizuishan totals 4.3 billion tons, With the best-quality silicon resources and one of the largest silicon outputs in the country, Shizuishan enjoys over 3,000 hours of sunshine a year. The photovoltaic industry in the city will exceed 40 billion Yuan in value in 2015 and the photovoltaic material industry will hit 100 billion Yuan in value in 2020. The city is working hard on implementation of a 4,500t/a polysilicon plant project of Jiangsu Sunshine Ltd and a 5,000t/a polysilicon plant project of Guodian Technology & Environment Co., Ltd., in a bid to achieve production capacity of 10,000t/a in the city. A closedloop photovoltaic value chain took initial shape. Solar power plants of China Energy Conservation Investment Co., Ltd., SDIC Huajing Power Holdings Ltd., Enfinity and Guodian Ningxia Ltd. are about to be built very soon. Once these plants were in full-scale operation, the city will see a silicon industry with 20,000t/a polysilicon capacity, 54 million solar cell chips and 100MW solar cell assemblies.

Changzhou Tianhe Photovoltaic Industrial Park Founded in April 2008, Tianhe Photovoltaic Industrial Park realized over 10 billion Yuan sales revenue in 2009. The industrial park currently accommodates over 20 photovoltaic manufacturers including Tianhe Solar Energy Ltd., Xiexin Photovoltaic Co., Ltd., Chuangda Photovoltaic Co., Ltd., Qiancheng Technology, Jinghe Photovoltaic Ltd, Yubang Photovoltaic Co., Ltd. and Jiangnan Power Co., Ltd., forming a vertically integrated photovoltaic value chain and laying a foundation for development of photovoltaic industry in the park. In addition to the aforesaid industrial parks, there are many others growing rapidly with respect to polysilicon and photovoltaic business, including Meishan Aluminum Silicon Industrial Park, Tuoketuo Industrial Park, Dunan Photovoltaic Industrial Park, Erdos Photovoltaic Industrial Park, Dongshan Industrial Park, Wanzhou Industrial Park and Heihe Polysilicon and Photovoltaic Industrial Park. The booming photovoltaic industry in the country is encouraging, but how to make reasonable planning for the emerging industry so that it could grow healthy and sound became an issue of longlasting concern for the development of the industry. Reasonable planning will definitely benefit the industry and the general public tremendously, especially in the early days of the industry.

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China Silicon Industry

Volume 3 Number 12

Statistics

Related Trade Data Article Description: Siloxane in Primary Form Tarrif Item (HS Code) 39100000 $/t

t 28000

5000

24000 4700

20000 16000

4400

12000

4100

8000 3800

4000

3500

0

Import Volume (2009.11-2010.10) Taiwan Taiw anChina China Mainland China 4% 5%

Others 6%

Import Price Trend (2009.11-2010.10)

Japan 18%

Qingdao 3%

Ningbo 2%

Others 3%

Jiulong 10%

U.S.A 9%

U.K. 13%

Germany 14%

South Korea 16% Thailand 15%

Guangzhou 12%

Nanjing 14%

Shanghai 38%

Huangpu 15%

Import Distribution form Each Customhouse Quay in Oct. 2010

Import Sources in Oct. 2010 t 6400 5600 4800 4000 3200 2400 1600 800 0

$/t 3800 3600 3400 3200 3000

Export Volume (2009.11-2010.10) Others 30%

Export Price Trend (2009.11-2010.10)

Hongkong China 20%

South Korea 13%

Brazil 4% Ukraine 4%

Tianjin 3%

Iran Taiwan Taiw anChina China 4% 5% Russian Federation 5%

Holland 7%

India 8%

Export Destinations in Oct. 2010

Dec. 25th, 2010

Jiujiang Jiulong 2% 4% Huangpu 11% Nanjing 12%

Others 8%

Shanghai 63%

Export Distribution from Each Customhouse Quay in Oct. 2010

25

Volume 3 Number 12

China Silicon Industry

Article Description: Silica Tarrif Item (HS Code) 28112200 $/t

t 12000

2600

10000 2400

8000 6000

2200

4000

2000

2000

1800

0

Import Volume (2009.11-2010.10) U.K. Singapore Thailand 3% 3% 3% Finland 4%

Import Price Trend (2009.11-2010.10)

Others 7%

Taiwan Taiw anChina China 23%

Indonisa 4%

Jiulong 4%

Others 5%

Qingdao 7%

Shanghai 30%

Nanjing 8%

Germany 6%

Japan 14%

South Korea 17%

U.S.A. 16%

Gongbei 8%

Tianjin 8%

Guangzhou 12%

Huangpu 14%

Import Distribution form Each Customhouse Quay in Oct. 2010

Import Sources in Oct. 2010

t 48000

$/t 900

40000

800

32000

700

24000 16000

600

8000

500

0

400

Export Volume (2009.11-2010.10) U.S.A. 14%

South Korea 10%

Others 37%

Fance 3%

Dalian 4%

Italy 3%

Taiwan Taiw an China China Indonsia 4% Saudi Arabia 4% 4%

Vietnam 9% Japan 7% Germany 5%

Export Destinations in Oct. 2010

Dec. 25th, 2010

Export Price Trend (2009.11-2010.10)

Nanjing 5% Tiamen 6%

Huangpu 3%

Others 5% Qingdao 52%

Xiamen 8%

Fuzhou 10% Shanghai 11%

Export Distribution from Each Customhouse Quay in Oct. 2010

26

China Silicon Industry

Volume 3 Number 12

Article Description: Silicon Metal Tarrif Item (HS Code) 28046900 $/t 22000 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0

t 2000 1800 1600 1400 1200 1000 800 600 400 200 0

Import Price Trend (2009.11-2010.10)

Import Volume (2009.11-2010.10) Others 24%

Japan 33%

Holland 3% U.E.A 5%

Tianjin 4% Xiamen 6%

Wuhan 2%

Erlian 2%

Others 7%

Shanghai 7%

Thailand 5% Hongkong 5%

Canada 5%

U.K. 9%

South Korea 13%

Dalian 14%

Huangpu 58%

Import Distribution from Each Customhouse Quay in Oct. 2010

Import Sources in Oct. 2010

t 80000

$/t 2500 2400 2300 2200 2100 2000 1900 1800 1700 1600 1500 1400

60000 40000 20000 0

Export Volume (2009.11-2010.10)

Vietnam 9%

Others 4%

Tianjin 14%

U.S.A 13%

North Korea 74%

Export Destinations in Oct. 2010

Dec. 25th, 2010

Export Price Trend (2009.11-2010.10)

Changchun 16%

Others 11%

Dalian 59%

Export Distribution from Each Customhouse Quay in Oct. 2010

27

Volume 3 Number 12

China Silicon Industry

Article Description: Polysilicon Tarrif Item (HS Code) 28046190 $/t

t 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0

70000

60000

50000

40000

Import Volume (2009.11-2010.10) Others 13%

Norw ay 5%

Germany 19%

Import Price Trend (2009.11-2010.10) U.S.A. 39%

Others 12% Jiujiang 10%

Beijing 11%

South Korea 24%

Import Sources in Oct. 2010

Nanjing 31%

Shanghai 23%

Hangzhou 13%

Import Distribution from Each Customhouse Quay in Oct. 2010 $/t

t 250

110000

200

90000

150

70000

100

50000

50

30000

0

10000

Export Volume (2009.11-2010.10)

South Korea 11%

Others 7%

Japan 24%

Taiwan Taiw anChina China 32%

Germany 26%

Export Destinations in Oct. 2010

Dec. 25th, 2010

Export Price Trend (2009.11-2010.10) Nanjing 1% Xiamen 24%

Qingdao 25%

Others 1%

Shanghai 49%

Export Distribution from Each Customhouse Quay in Oct. 2010

28

China Silicon Industry

Volume 3 Number 12

Conference and Report Scheme of CRCSI (2011) Coming events of CRCSI are listed. For more information, please contact: Brant Bai E-mail: [email protected] Tel: +86-10-64440375

We will release a series of annual reports about silicon products. For details, please feel free to contact: Judy An E-mail: [email protected] Tel: +86-10-64435260 (You will get the semimonthly CSI in 2011 for free after you subscribe the annual report.)

Conference Events

Time

The 5th Silicone Fine Chemicals Conference   Sino-Indian Silicone Seller-buyer Meeting

Apr. 2011 Apr. 2011

The 5th Global Silicone Business Conference

Sep. 2011

The 4th World Polysilicon & PV Industry Summit

Dec. 2011

Annual Report Annual Report of China Fumed Silica Market in 2010 Annual Report of China Silicon Metal Market in 2010 Annual Report of China Polysilicon Market in 2010 Annual Report of China Siloxane Market in 2010 Annual Report of China Silicone fluid/Emulsion Market in 2010 Annual Report of China Silicone Rubber Market in 2010   Annual Report of China Silane Coupling Agent Market in 2010

We will release China Silicon Industry Whitebook 2010 in 2011. For details, feel free to contact:

Report China Silicon Industry Whitebook

Time 2011

Judy An E-mail: [email protected] Tel: +86-10-64435260

If you want to receive this monthly publication in 2011 free of charge, please complete this form, and feedback to us by email ([email protected]) or fax (+86-10-64444036-893): Name: Company: Position: Telephone: Fax:

If you would like to make comments or suggestions, please send email to [email protected] or dial +86-10-64415355.

Thanks for your feedback!

Email address:

Dec. 25th, 2010

29