M.Setek Co., a Tokyo-based unit of the electronics maker AU Optronics Corp. of Taiwan, will halt production of polysilicon for the solar industry and take a charge of 24.65 billion yen ($208 million) to write down assets.
The board decision was made because of changes to supply and demand in the market that left M.Setek without a competitive advantage, AU Optronics said in a statement to the Taiwan stock exchange on Jan. 8. M.Setek will focus on production of ingots.
Polysilicon prices have plunged 83 percent in the past five years, as larger manufacturers brought on capacity to feed the booming market for photovoltaic panels. M.Setek didn’t rank among the top 10 makers of polysilicon, which is the raw material used to make most PV panels, according to data compiled by Bloomberg.
“No volume polysilicon production by AUO was tracked during the past couple of years, so this announcement is not surprising,” said Wang Xiaoting, a Hong-Kong based analyst for Bloomberg New Energy Finance.
Polysilicon manufacturing is dominated by bigger producers led by GCL-Poly Energy Holdings Ltd. of Hong Kong, Wacker Chemie AG of Germany, OCI Co. Ltd. of South Korea and Hemlock Semiconductor Corp. in the U.S.
An official at M.Setek’s plant in Fukushima prefecture in northern Japan could not immediately comment. AUO, based in Taiwan, holds 99.99 percent in M.Setek.
“More than 20 percent oversupply of polysilicon occurred in 2015, which was the intrinsic reason of a 30 percent drop of spot price over the year,” Wang said by e-mail. “A polysilicon glut is still anticipated for the new year and some expansion plans especially those in China have been suspended.”
Lead image: Solar panels. Credit: Shutterstock.