DJ Potential Winner in the Downcycle GCL Technology's Granular Silicon Products Demonstrate Strong Competitiveness and Counter-cyclical Capabilities
EQS Newswire / 06/11/2023 / 10:10 UTC+8
Potential Winner in the Downcycle
GCL Technology's Granular Silicon Products Demonstrate Strong Competitiveness and Counter-cyclical Capabilities
Prices in the photovoltaic supply chain have been in a downward trend over the past few months. Although the price of
polysilicon has rebounded from the bottom in the third quarter, the overall profitability of the polysilicon industry
has declined. Faced with the complete reversal of the polysilicon shortage situation, the market has shifted to
comprehensive competition on quality and cost. GCL Technology Holdings Limited's ("GCL Technology," 3800.HK) granular
silicon products have shown outstanding advantages in electricity consumption, heat consumption, and use of manpower.
Such granular silicon products have also demonstrated strong competitiveness and counter-cyclical capabilities in terms
of cost control and profitability.
A Potential Winner in the Downcycle
In a research report published by HSBC Global Research on 1st November 2023, a "BUY" rating was reaffirmed for GCL
Technology. The report pointed out that the gradual narrowing of the price difference between granular silicon and rod
silicon in the third quarter of 2023, along with the fact that GCL Technology maintained full production and full sales
status even during the industry downcycle, indicating that GCL Technology has well addressed the previous market
concerns on the quality of its granular silicon products. An analyst at HSBC Global Research stated that while GCL
Technology's peers are struggling to break even, the cost advantage of GCL Technology's granular silicon products will
gradually become apparent, which will have a positive impact on its profitability. HSBC believes that GCL Technology is
a potential winner in the industry downcycle.
Breakthrough in Key Technology and Leading in Scientific Research and Development
GCL Technology has been dedicated to innovation and is at the forefront of polysilicon technology research and
development. GCL Technology's Fluidized Bed Reactor ("FBR") granular silicon has achieved leading technology, leading
cost, leading production capacity and lowest carbon emissions in the industry. Compared to the traditional Siemens
production method, the FBR method has fewer production processes, a concise and highly efficient reaction principle,
and has overcome the "pain points" of high energy consumption in polysilicon production, thereby helping the
photovoltaic industry reduce carbon emissions.
In only two and a half years, GCL Technology has increased its granular silicon production capacity from 10,000 metric
tonnes to the current 400,000 metric tonnes, and it has completed a comprehensive iteration from the Siemens-based rod
silicon production process to the granular silicon production process, leading to full coverage of industry leading
customers in the downstream.
In terms of product quality, GCL Technology has already completely solved the application problems of granular silicon
such as silicon skipping caused by hydrogen back in 2021. According to the latest data released by GCL Technology, the
proportion of its granular silicon products with total metal impurity of ?0.5ppbw has reached nearly 90%.
High Shipment Volume is the Best Proof of High Quality
Driven by the rapid increase of GCL Technology's granular silicon production capacity, leading specialized downstream
wafer clients, represented by TCL Zhonghuan Renewable Energy Technology Co., Ltd.* (TCL?????????????), and
vertically integrated downstream clients, represented by LONGi Green Energy Technology Co., Ltd* (??????????
??) and JA Solar Technology Co., Ltd.* (?????????????), have fully entered into large-scale application
of granular silicon. The proportion of granular silicon used in their production has exceeded that of rod silicon in
certain ingot production sites. According to two recent voluntary announcements made by GCL Technology, the shipment
volume of granular silicon in the third quarter of 2023 has been very impressive, reaching approximately 67,607 metric
tons (including internal sales of approximately 3,611 metric tons). From January to September 2023, the granular
silicon shipment to GCL Technology's top five customers amounted to approximately 42,000 metric tonnes, 30,000 metric
tonnes, 13,000 metric tonnes, 12,000 metric tonnes and 9,000 metric tonnes, respectively, which accounted for nearly
82% of GCL Technology's total granular silicon external shipment.
Long-term Development Prospects for the Photovoltaic Industry Remains Optimistic
Currently, the polysilicon industry has entered into a period of deep adjustment, with its prices hovering around the
bottom range in the short term. Many polysilicon companies are already struggling at the breakeven point, while some
companies with outdated technology and higher non-silicon costs have started to record losses. However, in the long
run, the "dual carbon" long-term target will guide the direction of energy transformation for the next few decades, and
cyclical pains will not affect the long-term development of the photovoltaic industry. GCL Technology's granular
silicon products have multiple advantages, such as low cost, high quality, and low carbon footprint. With its strong
competitiveness and counter-cyclical capabilities, GCL Technology is well-positioned to be a big winner in the
polysilicon industry especially when the industry's supply and demand turning point arrives.
* For identification purposes only.
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(END) Dow Jones Newswires
November 05, 2023 21:10 ET (02:10 GMT)
