Home / Business and Economy / China's Polysilicon Producers Unveil $7 Billion Restructuring Plan
China's Polysilicon Producers Unveil $7 Billion Restructuring Plan
31 Jul
Summary
- Chinese polysilicon producers in talks to create $7 billion fund
- Plan to acquire and shut down 1 million tons of lower-quality capacity
- Aim to restructure loss-making polysilicon sector
As of July 31, 2025, Chinese producers of polysilicon, a key component for solar panels, are in discussions to establish a 50 billion yuan ($7 billion) fund to acquire and shut down roughly a third of the country's polysilicon production capacity. The plan, which is expected to be launched in the fourth quarter of this year, is one of the strongest signals yet that the Chinese government's recent rhetoric against overcapacity is translating into concrete action.
According to GCL Technology Holdings, the top polysilicon producer in China, the proposed acquisition vehicle would seek to purchase and close at least 1 million metric tons of lower-quality polysilicon capacity. This move is intended to restructure the loss-making polysilicon sector, which has been plagued by massive overcapacity and vicious price wars that have eroded profits.
The plan has been described as the "OPEC of the polysilicon industry," where a central committee would agree on total supply for a specified timeframe and allocate production quotas to individual producers. If successful, the closures would leave approximately 2 million tons of capacity remaining in the market, down from China's production capacity of 3.25 million tons at the end of 2024.
The polysilicon industry is just one of several Chinese sectors, including solar and electric vehicles, that are grappling with overcapacity issues. Beijing has previously restructured industries like steel and cement, but this latest round is expected to be more challenging as many of the problem sectors are now dominated by private firms with fewer growth sectors to absorb the excess capacity.
