Hanwha to exit from polysilicon business in US – KED Global

Hanwha Solutions Corp., the energy unit of South Korea’s chemicals-to-financial conglomerate Hanwha Group, will likely withdraw from the polysilicon production business in the US by pulling the plug on the last polysilicon plant run by Norwegian firm REC Silicon ASA in the US.

According to sources on Friday, REC Silicon, in which Hanwha Solutions and its affiliate have the largest 33% stake, has recently suspended the operation of its polysilicon-production plant in Moses Lake, Washington State, and is said to cut down the plant’s employees and eventually shutter the facilities.

This was REC Silicon’s last polysilicon-manufacturing plant in the US after the company shut down its electronic-grade, or semiconductor-grade, polysilicon-manufacturing factory in Butte, MT, last year.

The factory operation suspension comes after REC Silicon failed to pass Hanwha Q Cells Co.’s final quality test of its solar-grade polysilicon, a move expected to lead to a termination of a 4 trillion won ($2.7 billion) deal signed in 2023 to supply REC Silicon’s polysilicon to Hanwha Q Cells, a solar power unit under Hanwha Solutions known as Qcells in overseas markets.

REC Silicon’s polysilicon plant closure would also thwart Hanwha Group’s ambitious plan to build a complete photovoltaic (PV) manufacturing value chain in the US, covering polysilicon, ingot, wafer, cell and module production.

Polysilicon or polycrystalline silicon is a raw material used by the solar PV and electronics industry.

LARGEST US SILICON SOLAR MODULE PROVIDER

Hanwha Q Cells currently operates two solar energy hubs in the US state of Georgia, in which the Korean solar PV leader churns out ingots, wafers, cells and modules.

Hanwha has made a massive investment to build a solar PV manufacturing value chain in the US to take advantage of the US government’s push for renewable energy.

Its manufacturing facilities in Dalton, completed in 2019, mainly produce solar modules, while the newer one built last year for 3 trillion won manufactures solar ingots, wafers, cells and modules.

With the two factories, Hanwha became the first company offering production lines for the four major phases of the solar value chain in North America, boasting the capacity to generate 8.4 GW of electricity from sunlight as of 2024, which was the largest in the US.

The Korean energy company acquired REC Silicon, renowned for its electronic-grade polysilicon production, for 249 billion won to become its largest shareholder in 2022.

Constructed in 2014, its solar-grade polysilicon-manufacturing facility in Moses Lake can produce 16,000 tons a year, enough to build 8 GW of PV modules.    

Its operation was temporarily suspended in 2019 due to a fall in orders amid fierce competition with a cheaper Chinese version, and then Hanwha took over it and resumed the operation after refurbishment in late 2023.

But seasoned employees and engineers had left REC Silicon during the temporary factory closure before Hanwha’s acquisition and after the permanent shutdown of the factory in Butte, hampering the development of high-grade, highly-purified solar-grade polysilicon that meets Hanwha Q Cells’ standards, said a source in the industry.

The equipment and machines were also old and worn, costing too much to replace, said an official from Hanwha Q Cells.

The Korean company is even considering selling its stake in REC Silicon, added the official.

Following the closure of REC Silicon’s polysilicon-manufacturing facilities, Hanwha Q Cells plans to use polysilicon offered by OCIM Sdn. (OCIM), a Malaysian polysilicon-manufacturing unit of Korean solar cell major OCI Holdings Co.

OCIM’s polysilicon is sold at $22 per kilogram, three times more expensive than Chinese polysilicon.

But considering that the US will impose up to 250% anti-dumping duties on China-made polysilicon, Hanwha would purchase polysilicon from OCIM at cheaper prices.

Write to Hyeon-woo Oh at ohw@hankyung.com
Sookyung Seo edited this article.