The 31/5 PV policy change in China led to Daqo New Energy Corp.’s exit from the wafer manufacturing business. Around 450 employees are set to be made redundant.
Last week, the Chinese polysilicon and wafer manufacturer announced it would stop production of wafers this month, due to “increasingly challenging market conditions.”
A spokesperson for Daqo tells pv magazine that the decision was taken after the Chinese Government announced abrupt changes to its solar PV policy, at the end of May.
Around 450 employees, based at Daqo’s facility in Chongqing, China, will be affected by the decision, as will roughly 430 MW of production capacity, or 100 million pieces of multicrystalline silicon wafers, says the spokesperson.
The production halt, to be completed in Q3, is expected to cost Daqo around US$21.6 million in fixed-asset impairment and restructuring costs in the third quarter of this year, it said in an earlier statement, roughly $1.6 million of which will comprise employee severance payments, and $20 million, impairment of long-lived assets.
Daqo will now focus solely on the production of polysilicon. It is currently executing two plans to expand capacity by 77,000 metric tons – Phase 3B; and Phase 4 – which should be completed by the end of 2019.