Ge Honglin: China ranks among the top in terms of polysilicon capacity and production globally, but there are still five major contradictions in the crystalline silicon industry that need to be resolved urgently

Building a New Ecosystem for High-Quality Development of the Crystalline Silicon Industry

—Excerpt from the Speech at the 2025 China (Leshan) Silicon Industry Chain Development Conference

China Nonferrous Metals Industry Association

Party Committee Secretary and President Honglin Ge

Currently, China has established a complete and controllable silicon industry chain and supply chain, processing silica as the raw material into silicon metal and downstream products, which mainly include three branches: the crystalline silicon industry chain, the silicone industry chain, and the alloy industry chain. Taking this opportunity, I would like to share three perspectives on how China's crystalline silicon industry can build a new ecosystem for high-quality development.

Breakthrough Achievements in

High-Quality Development of China's Crystalline Silicon Industry

In recent years, guided by the "dual carbon" goals, China's crystalline silicon industry has achieved a historic leap from scale expansion to quality enhancement through innovation and collaboration.

Global Dominance in the Crystalline Silicon Industry Fully Established

By the end of 2024, China's installed capacity of primary silicon metal reached 8.5 million mt/year, with production at 4.72 million mt/year; polysilicon capacity stood at 2.87 million mt/year, with production at 1.84 million mt/year; wafer capacity reached 1,170 GW/year, with production at 718 GW/year. These capacities accounted for over 85%, 94%, and 97% of the global total, respectively. Compared to 2020, the production shares of silicon metal and polysilicon increased by 14.6 and 18.8 percentage points, respectively, while wafer production grew 3.5-fold. The world's top two silicon metal enterprises, top seven polysilicon enterprises, and top ten monocrystalline silicon enterprises are all rooted in China, with key enterprises investing in Southeast Asia, the Middle East, and other regions, forming a new development pattern of "Chinese technology + global layout."

From 2005 to 2024, China's polysilicon capacity grew from 300 mt/year to 2.87 million mt/year, with its global share rising from 0.6% to 94.4%; production increased from 60 mt/year to 1.84 million mt/year, with its global share climbing from 0.2% to 94.2%.

Technological Equipment: From Catching Up to Leading

First, equipment levels lead globally, with a localization rate of 100%. All new capacity equipment in China's silicon industry has achieved localization, with some large-scale installations setting global benchmarks. The industrialization of large electric arc furnace technology for silicon metal and large-scale, energy-efficient polysilicon reduction furnace equipment has matured, transforming the industry landscape. The adoption of large Czochralski furnaces, hot zones, and crucibles for monocrystalline silicon production, combined with smart manufacturing, enables lower oxygen content, higher capacity, and better cost performance, accelerating the new round of N-type technology iteration. Current operating capacity exceeds 700 GW, accounting for over 70% of the total.

Second, we lead the world in electricity consumption for production, with significant benefits in efficient production and environmental protection. In 2024, the electricity consumption of China's 33,000 kVA large electric arc furnaces dropped to a minimum of 10,500 kWh/mt, with the daily output of a single furnace exceeding 65 mt. The average comprehensive electricity consumption for polysilicon production using the modified Siemens process fell to 55 kWh/kg, a 15.4% decrease compared to 2020. The average comprehensive electricity consumption for granular polysilicon dropped to 13.8 kWh/kg, while that for monocrystalline silicon production using the Czochralski method fell to 20 kWh/kg, a decrease of over 20% compared to 2020.

Third, we lead the world in high-end PV products, achieving breakthroughs in product structure upgrades. The quality of polysilicon products has significantly improved, with the production share of N-type polysilicon jumping from 4% at the beginning of 2023 to 70%, and the production share of granular polysilicon increasing to 15%. The product structure of wafers has continued to optimize, with the share of N-type wafers increasing from 10% at the beginning of 2023 to 70%.

Industrial layout has achieved centralized and intensive development.

First, leading enterprises have achieved integrated development. The completeness of the industry chain and strong supporting capabilities are important reasons for the high competitiveness of China's silicon industry globally. A number of leading enterprises, such as Tongwei, GCL, TBEA, and Hoshine, have continuously extended their upstream and downstream industrial chains, achieving integrated and coordinated development with a complete industry chain, efficient resource utilization, and environmentally friendly practices.

Second, key regions have achieved clustered and intensive development. The on-site conversion rates of the three traditional silicon industry bases in Xinjiang, Yunnan, and Sichuan have continued to increase. Emerging industry bases in Inner Mongolia, Qinghai, Ningxia, and Gansu are developing rapidly, with the crystalline silicon industry basically forming an industrial layout of "three old and four new" bases. The integrated clustering of industrial bases has yielded results, gradually forming a good situation of resource sharing, complementary advantages, and coordinated development, which is of great significance for continuously enhancing the resilience and competitiveness of the industry chain. Accelerating the green layout, the crystalline silicon industry is continuously concentrating in regions with energy advantages, especially clean energy advantages.

Third, production has achieved greener and lower-carbon development. The production sites of many leading enterprises in the industry have been included in the national "green factory" list. In the silicon metal sector, breakthroughs have been continuously made in desulfurization and denitrification technologies, as well as waste heat power generation and recycling technologies, which have been widely promoted and applied. In the polysilicon sector, comprehensive green and clean production throughout the entire process has been fully implemented. Meanwhile, the annual production of secondary silicon has reached 460,000 mt, accounting for 9% of the total supply of silicon metal. Institutions such as the Chinese Academy of Sciences are also working on recycling technologies for retired modules, laying the foundation for the sustainable development of industrial recycling.

It has strongly supported the leapfrog development of the PV industry.

Driven by technological progress in the crystalline silicon industry, over the past decade or more, the production cost of polysilicon in China has dropped significantly. The cost of polysilicon in PV systems has decreased from about 30% in 2010 to about 10% in 2024, effectively driving down the cost of PV power generation and laying the foundation for grid parity of PV power generation, contributing to China's green and low-carbon development.

Since 2021, China's installed capacity for wind and PV power generation has maintained double-digit growth. Among them, the YoY growth rate of PV installed capacity has exceeded 40% since July 2023. By the end of Q1 2025, the cumulative installed capacity for wind and PV power generation in China reached 1.482 billion kW, surpassing thermal power installed capacity (1.451 billion kW) for the first time. Among them, the cumulative installed capacity for PV power generation was 946 million kW, accounting for 24.8% of the total domestic installed capacity. The rapid development of the PV industry has made tremendous contributions to the green and low-carbon development of the entire society, with the crystalline silicon industry playing a leading role.

Challenges Facing the High-Quality Development of China's Crystalline Silicon Industry

While acknowledging the achievements, we must also be soberly aware that the industry's development has entered a critical period of "climbing hills and overcoming obstacles," with five major contradictions urgently needing to be resolved.

The first challenge is overcapacity. Currently, the capacity of each link in the domestic crystalline silicon industry chain far exceeds actual demand, leading to industry-wide losses due to overcapacity. By the end of 2024, the silicon metal capacity reached 8.5 million mt/year, while consumption was only 5 million mt; the effective polysilicon capacity was 2.87 million mt/year, with consumption at 1.51 million mt; the effective wafer capacity was 1,170 GW/year, with consumption at 649 GW. In 2025, the trend of capacity expansion continues, and the supply-demand imbalance intensifies. By the end of June 2025, the uncommissioned silicon metal capacity was 700,000 mt/year, and polysilicon capacity was 500,000 mt/year. It is expected that by the end of 2025, the capacity will reach 10 million mt/year and 3.37 million mt/year, respectively, while demand will only be 4.4 million mt and 1.3 million mt. Even compared to the 2030 target of 1,000 GW for PV installed capacity, the current capacity of each link still appears excessive. By May 2025, the domestic silicon metal inventory was approximately 930,000 mt, and polysilicon inventory was approximately 380,000 mt, equivalent to 3-4 months of downstream demand. The market supply and demand in each link are severely imbalanced.

The second challenge is "cut-throat competition." Currently, the market prices of each link in the crystalline silicon industry are still below the industry's production costs, and even below the cash costs of some enterprises. The vast majority of producers are operating at a loss. Various signs indicate that this "cut-throat competition" has not been effectively curbed and is showing an adverse trend of spreading to overseas markets. For example, the average price of polysilicon dropped to 38,000 yuan/mt in mid-May 2024, remaining below the industry's average cost for over a year; the average price of silicon metal dropped to 9,648 yuan/mt by the end of April 2025, remaining below the industry's average cost for 2 months; the average price of G10-sized wafers began to drop to 0.95 yuan/piece in mid-May, entering a stage of losses. In the first half of this year, the monthly operating rates of silicon metal, polysilicon, and wafers reached historical lows of 41.9%, 38.6%, and 44.3%, respectively. Moreover, some companies even sacrificed product quality to reduce costs and ensure survival, falling into a vicious cycle of "low quality and low price." Such cut-throat competition is undoubtedly a stopgap measure that not only fails to fundamentally solve problems but also depletes future development potential and erodes the brand and quality foundation accumulated by the silicon industry over the past two decades.

Third is the challenge of rapid technological iteration. Currently, the monocrystalline silicon PV industry is one of the sectors with the most frequent technological iterations. Examples include the replacement of thermal hydrogenation with cold hydrogenation in the polysilicon segment, the shift from polycrystalline casting ingot to monocrystalline pulling in the wafer segment, and the transition from P-type to N-type cells in the cell segment—all disruptive technological shifts. By the end of 2024, N-type TOPCon cell capacity had exceeded 800GW, capturing over 70% of the market, completing the mainstream technology replacement within three years. A batch of P-type cell capacity, along with some outdated and inefficient TOPCon cell capacity and related upstream and downstream supporting capacity, may exit the market.

Rapid technological iteration presents both opportunities and challenges. While it offers silicon enterprises the chance for momentum transformation and even overtaking on curves, it also brings operational and investment risks. For instance, challenges include how companies can maintain competitiveness in a high-investment, high-risk technological iteration environment, how to avoid rapid obsolescence of invested projects, and how to balance short-term profitability with long-term technological planning.

Fourth is the challenge of the international environment. In recent years, the US, Europe, and other regions have increasingly diversified import restrictions on Chinese PV products, ranging from traditional trade barriers such as anti-dumping, anti-subsidy, and anti-circumvention measures to new-type trade barriers involving carbon emissions, environment, human rights, technical patents, and product certification. For example, on December 12, 2024, the EU issued the "EU Market Ban on Forced Labor Products Regulation" (applicable from December 14, 2027), prohibiting the sale, import, or export of products allegedly involving forced labor. On January 14, 2025, the US Department of Homeland Security announced the addition of 37 Chinese companies to the so-called "Uyghur Forced Labor Prevention Act Entity List," including five new Chinese monocrystalline silicon PV enterprises in addition to the previous five silicon enterprises. The US, Europe, and other regions have explicitly stated their intention to "reduce dependence on China" in raw material supply chains, including the silicon industry. China's silicon industry chain faces dual pressures of "policy bottlenecks" and "de-Sinicization" in its external circulation. Historical experience shows that transitioning from "exporting products" to "global industrial layout" and establishing a more robust global supply chain is an inevitable path for Chinese monocrystalline silicon PV enterprises. To this end, we must steadfastly pursue the path of openness.

Build a new ecosystem for the high-quality development of China's crystalline silicon industry

In the face of new trends, challenges, and patterns in industrial development, we must maintain strategic resolve, strengthen our confidence in development, and, in the process of accelerating high-quality industrial development, take the "15th Five-Year Plan" as an opportunity to adhere to the "five integrations" and drive the industry towards high-end, intelligent, and green development.

First, integrate the present with the future and meticulously plan the "15th Five-Year Plan" development blueprint. This year marks the conclusion of the "14th Five-Year Plan" and the initiation of the "15th Five-Year Plan". Crystalline silicon enterprises should comprehensively and systematically summarize the development experiences during the "14th Five-Year Plan" period, deeply analyze the issues and challenges facing the industry, scientifically assess the trends in industry development, and lay a solid foundation for the "15th Five-Year Plan". Great importance should be attached to planning for the development of new quality productive forces in the crystalline silicon industry. In particular, priority should be given to the layout of breakthroughs in high-end silicon-based materials for semiconductor applications, including the establishment of a full-chain innovation system encompassing "R&D - pilot testing - industrialisation" to drive the industry towards the high-end of the value chain, from "material production - device assembly - system integration".

Second, integrate competition with collaboration and deepen supply-side structural reforms. Currently, the CPC Central Committee and the State Council attach great importance to the issue of "cut-throat competition". High-level meetings such as the Political Bureau of the CPC Central Committee meeting and the Central Economic Work Conference held last year have all put forward clear requirements for addressing "cut-throat competition". This year's National Two Sessions also included "comprehensively addressing 'cut-throat competition'" in the Government Work Report for the first time. Supply-side structural reforms in the crystalline silicon industry are imperative. It is necessary to curb irrational expansion and regulate investment order in the industry. We should draw on the successful experiences of supply-side structural reforms in industries such as electrolytic aluminum, fully leverage market-oriented means, strictly control new capacity additions, and promote the healthy and sustainable development of the industry. Industry self-regulation and market supervision should be strengthened. It is necessary to address low-quality and low-price competition, establish a supply and demand early warning platform for the entire industry chain, and drive leading enterprises to take the lead in forming an "industry community of shared future" to jointly safeguard reasonable profit margins. It is necessary to promote industrial restructuring and mergers and acquisitions. We should use energy consumption and quality standards to force the accelerated exit of backward production capacity, support leading enterprises in carrying out mergers and acquisitions, enhance the comprehensive competitiveness of top-tier enterprises, and further consolidate and enhance global discourse power.

Third, integrate technological innovation with iterative investment to maintain international competitiveness. The fundamental reason why China's crystalline silicon PV industry has been able to lead the world is technological innovation. To continue maintaining the industry's advantageous position, we must still rely on technological innovation. We should closely align with national strategies, focus on cutting-edge areas such as N-type technology upgrades and PV+ESS integration, jointly establish a "silicon material innovation consortium" with research institutes, break through "bottleneck" technologies such as semiconductor wafers and electronic-grade polysilicon, accelerate the process of addressing weaknesses and strengthening strengths, and further consolidate the industry's advantages. In technological innovation, it is essential to coordinate the relationships among pre-research, development, and application generations, forming a spiral iterative model to achieve sustainable growth in economic benefits. Investment should be quality- and benefit-oriented, tailored to the specific needs of enterprises to maximize their benefits. It is crucial to prevent blind, trend-following investments and those that infringe upon technological intellectual property rights. Currently, it is particularly important to prevent investments that pursue scale expansion, increase production, engage in homogeneous competition, and exacerbate "cut-throat competition."

Fourthly, it is necessary to coordinate energy conservation and emission reduction with clean energy to shape a new green image. PV is a green energy source, and the development of the crystalline silicon industry has strongly supported the growth of green energy. However, from the perspective of the crystalline silicon industry itself, there are environmental constraints and new requirements for green and low-carbon development. The entire industry should accelerate the promotion of low-carbon development throughout the life cycle, actively promote advanced energy-saving and environmental protection technologies, and drive the industry to continue to relocate and concentrate in regions with clean energy advantages, continuously increasing the proportion of clean energy applications and enhancing the green foundation for the high-quality development of the silicon industry. It is also necessary to accelerate the improvement of the recycling system, increase the recycling and utilization of silicon sludge and PV modules, raise the proportion of secondary silicon supply, and create a closed loop of "green silicon materials - clean energy - recycling."

Fifthly, it is necessary to coordinate domestic and international aspects to build a new development pattern of dual circulation. Facing increasingly complex and severe international situations and internal challenges from the growing pressure of structural reforms in the industrial supply side, enterprises in the industry must further enhance their vigilance and risk prevention. They should continue to deeply cultivate the domestic market, actively align with policies such as the "Wind Power Initiative in Thousands of Townships and Villages" and the "County-wide PV Promotion," accelerate the expansion of new scenarios like BIPV and ESS, continuously cultivate and explore new demand growth poles, and continuously enhance the resilience and safety level of the industrial chain and supply chain. They should also continuously optimize their international layouts, relying on the "Belt and Road Initiative" to establish "localized + Chinese technology" production sites in Southeast Asia and the Middle East, circumvent trade barriers, strengthen industry self-discipline in exploring international markets, and avoid disorderly competition.