China’s six largest polysilicon producers are reportedly developing a $7 billion plan to reduce oversupply and stabilize prices, according to S&P Global senior market analyst Xin You. If implemented, the move could lift prices across the supply chain in a short period.
The plan involves industrial-level consolidation, which is technically feasible due to higher market concentration and rigid capacity. However, the biggest hurdle may be the lack of consensus among top-tier companies, many of which are struggling with worsening debt and cash positions.
To support large-scale acquisitions, policy banks and state-owned enterprises may need to provide financial backing. The plan aims to remove around 1 million metric tons of capacity, with valuations ranging from CNY 50,000 to CNY 70,000 per metric ton, bringing total funding to $7 billion to $10 billion.
If successful, the market would retain about 2 million metric tons of capacity, with utilization rates controlled at 60-70% to meet demand. Xin You predicts that if implemented, prices would rise in a short time as wafer manufacturers stockpile cheaper polysilicon and drive up prices.
However, she notes that stable prices may stay just above production costs, as remaining capacities still exceed global demand. Stricter power consumption requirements may also be implemented to accelerate the acquisition process, forcing outdated facilities to shut down and reduce negotiations’ difficulty.
Source: https://www.pv-magazine.com/2025/08/14