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Shares of silicon companies are sliding. In the A-share market, Guangzhou Jointas Chemical is sliding nearly 9%, New Universal Science and Technology is down 5.5%, Chengdu Guibao Science & Technology sliding more than 3.5%, Hoshine Silicon Inudstry down 3.2%. In Hong Kong, Xinte Energy is sliding nearly 12% and GCL Tech down 5%.
Silicon is by far the most common semiconductor material used in solar cells. Galaxy Securities said in a note that the rising competitions will drive lower the prices in the silicon industry and the sector is expected to start a downward cycle.
China’s domestic silicon material output reached 61,700 tonnes in August 2022, rising by 5.47% from the previous month and in September, silicon material output is expected to rise by around 20% from the previous month as power supply recovers in Sichuan province, equipment maintenance ends and new capacity is gradually put into operation, according to Cinda Securities, citing data from Solarzoom.
Newly added effective silicon capacity is expected to reach around 1.1 million tonnes in 2023, with annual effective annual capacity to reach around 2.4 million tonnes, and the prices along the supply chain are expected to decline further, according to Solarzoom.