What material is polysilicon? Why does its price soar recently?

　　Polycrystalline silicon material is an electronic material that uses industrial silicon as raw material and is purified to a certain purity after a series of physical and chemical reactions. It is the main raw material for manufacturing silicon polished wafers, solar cells and high-purity silicon products. It is used in the information industry and new energy industry. The most basic raw materials.

　　First of all, it needs to be clarified that polysilicon (material) is not equal to polysilicon (flaky). Polysilicon wafers are products made from silicon materials through a series of processes. The two are often misunderstood because of the poor distinction between the names.

　　The purity of silicon determines its application field. The purity of solar-grade polysilicon used in photovoltaics is generally between 6N and 9N (that is, 99.9999% to 99.9999999%, and a few 9 is a few N). As for silicon materials used in semiconductors, the purity requirements must reach 11N, and the process difficulty is far beyond the solar level.

　　Polysilicon is an industry with obvious Matthew effect. Large-scale enterprises rely on capital and technological advantages to always maintain more orders, higher operating rates and scale effects, which can bring high profits, thereby further ensuring its first-mover advantage in future R&D and production technology upgrades. On the other hand, companies with poor competitiveness have gradually shut down, and the decline in global production capacity in 2020 will be affected by this.

　　As the most upstream of the photovoltaic industry, silicon material is the core of the mainstream solar cell production process, and its price is one of the core factors affecting the terminal price of photovoltaic products.

　　Now benefiting from the continuous progress of processing technology, the cost of polysilicon continues to drop, which can greatly reduce the purchase price of downstream companies. This has opened up profit margins for the downstream to a certain extent, and has also stimulated the willingness of enterprises to produce photovoltaic modules.

　　Although the price of polysilicon has shown a clear downward trend in the long run, there has been a very crazy rise since 2021. In just six months, the price of polysilicon has risen several times, from US$14/kg to more than US$30/kg, and some orders have even reached US$35/kg.

　　The reasons for the crazy price increase are more complicated.

　　First of all, it cannot be ruled out that some companies have bad behaviors such as reluctance to sell and raise prices. Some insiders say that the current silicon production capacity can actually meet downstream demand, which is a sign of a shortage of polysilicon deliberately manufactured by downstream companies, driving up prices.

　　Second, objectively speaking, insufficient upstream capacity is a fact. Affected by the policy, downstream companies, in order to occupy market share as soon as possible, and expand their production capacity rapidly, there is indeed a phenomenon of seizing upstream production capacity - this is very similar to the recent chip shortage. Correspondingly, the capacity expansion of the upstream supply side is lagging, and the expansion cycle of silicon materials is relatively long, which further aggravates the shortage of goods.

　　But overall, short-term abnormal shocks are unlikely to become a long-term trend. After the expansion of upstream and downstream production is completed and demand stabilizes, the price of silicon materials will return to normal, and the long-term trend of price reduction will not change.

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