Polysilicon's "Chinese Dream"

**Abstract** The development of polysilicon in China has been a journey marked by both rapid growth and significant challenges. Starting in the 1950s, early research was led by factories such as Luoyang Semiconductor and Handan Semiconductor. As semiconductor technology advanced, additional polysilicon production facilities were set up in regions like Shaanxi and Hebei. However, the Cultural Revolution in the 1960s disrupted progress, and after the reform and opening-up, the focus of China’s electronics industry shifted away from upstream materials like polysilicon, leading to a technological lag compared to the West. In 2005, the German Renewable Energy Law spurred a boom in the photovoltaic (PV) industry, which dramatically increased demand for polysilicon. Prices soared from around $20 per kilogram to over $480 in 2008, making “Silicon is King” a common phrase. This surge attracted massive investment, particularly from Chinese companies, resulting in the establishment of nearly 100 polysilicon firms nationwide, with total investments exceeding 140 billion yuan. However, the financial crisis in 2008 caused a sharp drop in prices, forcing many companies to shut down. The PV market rebounded in 2009, but by 2011, the European debt crisis and U.S. trade disputes triggered another downturn. Polysilicon prices fell from 700,000 RMB per ton to as low as 80,000 RMB per ton, causing most Chinese producers to halt operations. By 2012, imports exceeded domestic production, highlighting the industry's struggles. International manufacturers, on the other hand, fared better due to their long-term cost control and cautious expansion strategies. They avoided overproduction during price surges and maintained stability even during the 2011 crisis. Meanwhile, Chinese companies faced intense competition, especially when global giants initiated price wars, further squeezing domestic producers. The Siemens process, the dominant method for polysilicon production, remains energy-intensive and costly, limiting its viability for the PV industry. Alternative methods like the silane process have been explored but face safety and economic challenges. Despite attempts by some Chinese firms, these new technologies have not yet provided a sustainable solution. Ultimately, the future of the polysilicon industry depends on innovation and cost reduction. While international players have dominated for years, the rise of cost-conscious markets and new technologies may reshape the landscape. The story of China’s polysilicon industry reflects the broader dynamics of global energy transitions and industrial competition.

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