Recently, Daquan Energy, a leading silicon company, released its 2023 report stating that it achieved operating revenue of 16.329 billion yuan last year, a year-on-year decrease of 47.22%; net profit attributable to shareholders of listed companies was 5.763 billion yuan, a decrease of 69.86% over the previous year.
“Silicon production exceeds demand in 2024 and 2025.” Xu Xiang, vice chairman of Daquan Energy, said at the online performance conference held this morning that 2024 is the first year that N-type silicon will replace P-type silicon. It is estimated that the proportion of N-type silicon will account for 70% of the whole year, the proportion of P-type silicon will account for 30%, and the proportion of N-type silicon will not be less than 90% after 2024. The supply and demand for high-quality N-type silicon materials remained flat in 2024, and there was a slight oversupply in 2025.
Xu Xiang clarified two points in the description: N-type silicon is the direction of development, and there will also be an oversupply of high-quality N-type silicon next year.
Photo source: Shanghai Stock Exchange Roadshow
P type material and N type material are all types of polysilicon. Polysilicon is mainly used in the photovoltaic and semiconductor industries. China's polysilicon production has continued to expand in recent years. According to public information, when silicon is mainly mixed with Group III elements, such as boron, it is mainly porous and is a P-type material; when silicon is mainly doped with V-group elements, such as phosphorus, it is mainly electronically conductive and is an N-type material.
The reason behind N-type silicon rapidly taking over the market is an industry transformation triggered by the iteration of N-type technology.
In 2021, N-type battery technology began to be mentioned, but it was more limited to the laboratory level. In 2022, N-type battery technology left the laboratory and began the first year of mass production. By the end of 2023, N-type battery production capacity will reach 676GW. According to CPIA forecasts, the average conversion efficiency of N-type batteries is expected to exceed 26% by 2030, which is significantly superior to the conversion efficiency level of P-type batteries during the same period.
According to information, at present, only a few domestic companies, such as Daquan Energy, Tongwei Co., Ltd., and TBEA, have mastered N-type silicon technology, and the above companies are also in the first tier with this technology.
According to Daquan Energy's annual report, in 2023, the production capacity of polysilicon will exceed 200,000 tons/year, and the production and sales rate will reach 101.10%. According to data from the Silicon Industry Branch, domestic polysilicon production exceeded 1.43 million tons in 2023, and Daquan Energy's polysilicon production period was 197,800 tons, accounting for about 13.83% of domestic polysilicon production. In 2022, domestic polysilicon production was about 811,000 tons, and polysilicon production during the corresponding period was 133,800 tons, accounting for 16.50% of domestic polysilicon production.
Image source: Daquan Energy Financial Report
Along with the rapid increase in production capacity in the industry, silicon prices “dived. Take Daquan Energy as an example. The annual report shows that the sales price of Daquan Energy polysilicon in the fourth quarter of 2023 was 57.42 yuan/kg, down nearly 69.8% from the first quarter of 2023. In 2024, silicon prices are still in a downward channel.
In response to falling prices, Xu Xiang said that to respond positively to changes and customer needs, as long as the price is above full cost, it should be exhausted.
According to Wang Xiyu, director and general manager of Daquan Energy, the total cost of its polysilicon production is 48.70 yuan/kg, and the cash cost is 42.70 yuan/kg. According to Huayi World, on April 1, the price of polysilicon was 560-580,000 yuan/kg, so it is estimated that its gross profit may drop further this year.
Xu Xiang said that the gross profit margin was increased by upgrading the product of old devices; improving the utilization rate of secondary energy such as steam and electricity; and optimizing and adjusting the quality of raw materials and accessories. “In 2024, we will promote good performance throughout the year through a continuous and stable supply of high-purity silicon materials and full production and sales strategies.”
In addition to reducing costs and improving quality and expanding production, Daquan Energy is also trying to create its second growth curve.
Currently, in the semiconductor silicon market, domestic demand is strong and there is a strong desire to replace imports. According to its annual report, the 1,000-ton semiconductor polysilicon project built by Daquan Energy in Inner Mongolia was supplied with water, electricity, and ventilation in the third quarter of 2023, and is currently being tested as a single unit. According to its annual report, silicon materials for 12-inch silicon wafers, silicon materials for 8-inch silicon wafers and electronic speciality will be important directions for product planning, as well as new value growth poles for the company in the future.
“The semiconductor silicon industry is an integrated circuit industry. The equipment and material selection requirements for devices are strict, and equipment manufacturing process companies must strictly supervise manufacturing; some major equipment involves overseas procurement, and delivery times are long; the construction process requires a very high degree of cleanliness.” According to Xu Xiang, semiconductor silicon materials have very high system requirements, and factory inspection conditions are strict. After the product is produced, the company will verify the product downstream and make plans for the next step based on the verification results.
Also, according to the annual report, overseas silicon materials have a higher premium level, and developing overseas markets and increasing share are also the focus of their market development plans.