POLYCRYSTALLINE SILICON MARKET ANALYSIS

Global polycrystalline silicon market size is expected to be valued at US$ 9.64 Bn in 2023, and is estimated to reach US$ 23.24 Bn by 2030 at a CAGR of 13.4% from 2023 to 2030.                  

Global polycrystalline silicon market growth is driven by increasing demand for solar photovoltaics (PV) and growing use of polycrystalline silicon in the electronics industry.

The solar PV industry is the largest consumer of polycrystalline silicon, and thus, account for over 90% of the global demand. There has been rising demand for solar PV due to increasing need for clean and renewable energy sources. The global polycrystalline silicon market is expected to grow at a CAGR of 11.4% from 2022 to 2030.

Global Polycrystalline Silicon Market- Regional Insights

• Asia Pacific: Asia Pacific is the largest market for polycrystalline silicon, with a market share of over 60% in 2022. The region has major polycrystalline silicon producers including China, South Korea, and Taiwan. The high demand for polycrystalline silicon in Asia Pacific is driven by the region's rapid growth in solar photovoltaic (PV) installations.
• North America: North America is the second largest market for polycrystalline silicon, with a market share of around 15% in 2022. The region is home to a number of major polycrystalline silicon producers, including the U.S. And Canada. The demand for polycrystalline silicon in North America is driven by the region's growing renewable energy market.
• Europe: Europe is the third largest market for polycrystalline silicon, with a market share of around 10% in 2022. The region is home to a number of major polycrystalline silicon producers including Germany and Italy. The demand for polycrystalline silicon in Europe is driven by the region's commitment to reduce its carbon emissions.

Figure 1. Global Polycrystalline Silicon Market Share (%), By Region, 2023

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Global Polycrystalline Silicon Market- Drivers

• Solar Energy Demand: Polycrystalline silicon is a crucial material that is used in the production of solar panels. Increasing global demand for renewable energy sources, particularly solar energy, has been a significant driver for the polycrystalline silicon market growth. As governments and industries worldwide are shifting towards cleaner energy solutions, demand for solar panels and, demand for polycrystalline silicon is also rising. For instance, according to U.S. Energy Information Administration, the demand for solar panels and polycrystalline silicon has been on the rise. In 2022, solar photovoltaic panel shipments in the U.S. increased by 10% from 2021, setting another annual record.
• Growing Photovoltaic (PV) Installations: The photovoltaic industry, which relies on solar panels, had been experiencing steady growth in installations for both residential and commercial purposes. The expansion of PV installations contributes to increased demand for polycrystalline silicon. For instance, according to National Renewable Energy Resource H1 2022, PV installations increased significantly (y/y) in China (137%) and India (82%), and to a lesser extent Germany (16%).
• Technological Advancements: Continuous research and development efforts in the solar industry leads to improvements in polycrystalline silicon manufacturing processes, resulting in higher quality and more efficient solar cells. This improvement in technology boosts demand as it makes solar energy more cost-effective and competitive.
• Government Incentives and Policies: Supportive policies and incentives provided by governments in various countries to promote renewable energy adoption had a positive impact on the polycrystalline silicon market. Subsidies, tax credits, feed-in tariffs, and other financial incentives encouraged consumers and businesses to invest in solar energy systems, and this boosted demand for polycrystalline silicon.

Global Polycrystalline Silicon Market- Opportunities

• Emerging Solar Markets: While solar energy adoption is already growing in mature markets, there is significant opportunities in emerging economies with vast untapped solar potential. Countries in Asia Pacific, Africa, and Latin America are showing increasing interest in solar energy as a way to meet their growing energy demands sustainably. Expanding into these regions can offer opportunities for polycrystalline silicon manufacturers to tap into new markets.
• Technological Innovations: Continued research and development (R&D) in the solar industry offered opportunities for improvements in polycrystalline silicon technology. Enhancing the efficiency of solar cells, reducing production costs, and developing new manufacturing techniques are some of the areas where advancements could lead to increased market share and competitiveness.
• Energy Storage Integration: Energy storage solutions such as batteries are gaining traction to address the intermittent nature of solar energy. Integrating energy storage with solar installations could offer a more stable and reliable power supply, making solar energy an even more attractive option for consumers and businesses. Polycrystalline silicon manufacturers could explore opportunities to collaborate with energy storage companies or diversify their product offerings to include integrated solar-plus-storage solutions.
• Circular Economy Initiatives: As sustainability and environmental concerns became more prominent, there is growing interest in circular economy practices. Polycrystalline silicon manufacturers could explore opportunities to improve the recycling and reclamation processes for solar panels, reducing waste and environmental impact. Developing circular economy strategies could enhance the industry's reputation and open up new business possibilities.

Global Polycrystalline Silicon Market- Trends

• Increasing Solar Energy Capacity: The global capacity of solar energy installations was experiencing by significant growth. As solar power became more cost-effective and competitive, there has been increase in demand for polycrystalline silicon, which is a key material used in the production of solar panels.
• Shift towards Monocrystalline Silicon: While polycrystalline silicon dominated the solar market for many years due to its lower production costs, there was a gradual shift towards monocrystalline silicon panels. Monocrystalline panels offered higher efficiency and a smaller footprint, thus, making these increasingly attractive to consumers and businesses looking for higher energy yields in limited spaces.
• Technological Advancements: Continuous research and development efforts in the solar industry leads to improvements in polycrystalline silicon manufacturing processes and solar cell efficiency. Advanced manufacturing techniques such as PERC (Passivated Emitter and Rear Cell) technology, enhanced the performance of polycrystalline silicon-based solar cells.
• Sustainability and Environmental Concerns: With growing environmental awareness, consumers and industries are increasingly inclined towards sustainable and eco-friendly solutions. Polycrystalline silicon, being a crucial material in renewable energy production, aligned with the new trend and contributed to the popularity of solar energy as a clean energy source.

Global Polycrystalline Silicon Market- Restraints

• Intense Competition: Global polycrystalline silicon market is highly competitive, with numerous manufacturers and suppliers vying for market share. Intense competition could lead to price wars and margin pressures, thus, affecting the profitability of businesses operating in the market.
• Raw Material Costs: The production of polycrystalline silicon requires high-quality raw materials, such as metallurgical-grade silicon, which can be subject to price fluctuations. The availability and cost of these raw materials could impact the overall production costs of polycrystalline silicon. For instance US Department of Energy's report on Solar Photovoltaics - Supply Chain Deep Dive Assessment states that there is a high capital expenditure involved in the manufacturing process of polycrystalline silicon, which is a key restraint identified in the market
• Trade Barriers: Trade disputes and tariffs between major economies could create trade barriers and disrupt the flow of polycrystalline silicon and related products. Import/export restrictions and tariffs might lead to supply chain challenges and increased costs for manufacturers and consumers.
• Energy Intensive Manufacturing: The production of polycrystalline silicon is energy-intensive, and requires significant electricity consumption. Rising energy prices could add to the production costs of polycrystalline silicon, impacting the overall competitiveness of solar energy as a renewable energy source.
• Counterbalance: Market players should focus on production of polycrystalline silicon in the manner that will help in controlling the cost of materials, remove the trade barriers and also help in manufacturing the same with limited energy consumption.

Global Polycrystalline Silicon Market – COVID-19 Impact

• The COVID-19 pandemic has had a significant impact on the global polycrystalline silicon market. Polycrystalline silicon is a key raw material used in the production of solar panels, which are widely used in the renewable energy sector. The pandemic has disrupted supply chains and caused a slowdown in the construction industry, which has led to a decrease in demand for solar panels.
• In the early stages of the pandemic, many countries implemented lockdowns and travel restrictions, which disrupted the transportation of polycrystalline silicon and other raw materials. This led to supply chain disruptions and shortages, which caused prices to rise. However, as the pandemic continued, demand for solar panels decreased due to the economic slowdown and reduced construction activity.
• The pandemic has also affected the production of polycrystalline silicon. Many manufacturing facilities were forced to shut down temporarily due to lockdowns and social distancing measures. This led to a decrease in production capacity and delays in the delivery of products.

Global Polycrystalline Silicon Market- Analyst Viewpoint

• Global polycrystalline silicon market is expected to witness growth steadily owing to rising demand from the photovoltaic and electronics industries. Government policies and regulations supporting solar photovoltaic deployment is expected to boost adoption of polycrystalline silicon. Rising demand for poly-Si from the electronics sector and increasing consumption of electronic devices globally are expected to drive the market growth. The Asia Pacific region dominates the market and is likely to continue its lead due to high consumption and production of solar panels in China.
• However, overcapacity challenges and price volatility in the solar supply chain remains a concern. Fluctuations in polysilicon prices can negatively impact the profitability of module and cell manufacturers. Shifting trade policies amid the global trade war also poses risks. Countries are likely to impose import tariffs on solar products to support local manufacturers, which may disrupt the supply chains. Furthermore, fluctuation in raw material prices can squeeze margins for poly-Si producers.
• Increasing adoption of renewable energy targets by countries provides sizable market opportunities. Rapid economic growth in developing nations will boost the demand for infrastructure and construction industries. Technological advances to lower manufacturing costs could encourage capacity additions. Polysilicon producers are focusing on expanding production capabilities and targeting high growth emerging markets to benefit from increasing demand.

Recent Developments

New product launches

• In 2023, ENN Solar Energy is a definitive directory of solar companies and product launched new silicon thin film solar modules with tandem junction technology. These modules have a power output per installed watt that is much higher than that of conventional photovoltaic (PV) cells. These can be used for a variety of applications, from utility scale ground mounted solar parks to integrated roof or facade solutions.
• In 2021, Xinyi Solar is a photovoltaic glass manufacturers announced that it will be entering the polysilicon production market, with an initial production capacity of 60,000 metric tons (MT). This new production capacity will help to meet the increasing demand for polysilicon, which is a key component in solar cells.
• Wacker Chemie is an international chemical company for highly developed specialty chemicals announced that it has developed a new process for the production of polycrystalline silicon that is more energy efficient and environmentally friendly. This new process could help to reduce the cost of solar cells and make them more widely accessible.

Acquisition and partnerships

• In March 2023, Tongwei is engage in production and distribution of feed products in China and internationally. acquired a 70% stake in the polysilicon business of LDK Solar
• In February 2023, Hanwha Chemical and KCC announced a partnership to build a 20,000 metric ton per year polysilicon plant in South Korea
• In January 2023, Wacker Chemie is a an international chemical company for highly developed specialty chemicals  acquired a 25% stake in the polysilicon business of OCI

Figure 2. Global Polycrystalline Silicon Market Share (%), By Manufacturing Technology, 2022

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Top companies in Global Polycrystalline Silicon Market

• Wacker Chemie AG
• OCI Company Ltd.
• GCL-Poly Energy Holdings Limited
• Hemlock Semiconductor Corporation
• Tokuyama Corporation
• REC Silicon ASA
• Daqo New Energy Corp.
• SunEdison, Inc. (acquired by MEMC Electronic Materials)
• LDK Solar Co., Ltd. (faced financial difficulties in the past)
• TBEA Co., Ltd.

*Definition: The polycrystalline silicon market refers to the industry that produces and sells polycrystalline silicon, a key material used in various applications such as solar panels, electronics, and semiconductor