Silicon is King

The rapid expansion of photovoltaic production capacity is driving the supply bottleneck of the industrial chain to accelerate the switch to the upstream. As the three important links of the photovoltaic industry chain, the source of polysilicon, silicon wafer and photovoltaic glass is ‘silicon’. With the rapid expansion of production capacity in the three links, the demand for upstream silicon materials has increased significantly. However, due to limited mineral resources and a long production expansion cycle, the supply of silicon resources cannot fully match the downstream demand, which has become the next ‘stuck’ link in the photovoltaic industry and the next outlet for companies to compete for layout.

As the most prominent part of the current photovoltaic supply chain contradiction, the price of silicon material is one of the hotspots that the market is most concerned about. As the main raw material of polysilicon, industrial silicon accounts for about 28% of the total cost, and the rise in its price has made polysilicon enterprises feel the pressure of rising costs. It is predicted that if the new global installed capacity is 210GW in 2022, and the demand for industrial silicon corresponding to photovoltaic is 880,000 tons, in terms of the estimated total output of industrial silicon of 2.7 million tons, the total industrial silicon gap will reach 300,000 tons. The new installed capacity of photovoltaic in the world has reached 240GW, and the supply gap of the entire industrial silicon is expected to reach about 700,000 tons. That is to say, if there is no sufficient industrial silicon raw materials as a guarantee, once the production capacity of silicon material enterprises is released in a concentrated manner, there may be a phenomenon of restricting production due to insufficient supply of raw materials.

The ‘new bottleneck’ in the supply of photovoltaic raw materials is not only reflected in the polysilicon link. As a kind of silica ore, high-purity quartz sand is the main raw material for the production of silicon wafer crucibles. In the past two years, the production capacity of the silicon wafer side has been released in a concentrated manner under the tide of violent production expansion of over 750GW, which caused a shortage of quartz crucibles for cooking silicon wafers. At present, the global high-purity quartz raw material ore resources are highly concentrated and extremely scarce. According to agency estimates, from 2022 to 2024, the global demand for high-purity quartz sand for photovoltaic crucible raw materials will be 67,500 tons, 89,600 tons, and 110,000 tons, respectively, and the gap between supply and demand will reach 4,500 tons, 13,600 tons, and 20,500 tons, respectively . It is worth mentioning that as silicon wafers move towards large size and N-type, in order to ensure the quality of crystal pulling, service life and safe production, the proportion of imported high-purity sand is increasing. This means that in the next few years, the supply of high-quality quartz sand will become one of the key bottlenecks restricting the production capacity of silicon wafers, and ‘having silicon as king’ will become more and more intense.

Quartz sand for photovoltaic glass requires an iron content of less than or equal to 150ppm (one part per million, which is a sand grade). At present, only high-quality vein quartz can meet this requirement through traditional beneficiation technology. When high-quality and scarce resources ‘hit’ the tide of aggressive expansion of photovoltaic glass production, and supply and demand tightened, prices rose again and again. In the cost structure of photovoltaic glass production, direct materials account for about 40%, and low-iron ultra-white quartz sand is one of the important raw materials (accounting for about 25% of raw material costs), second only to fuel costs. For the photovoltaic glass industry, which relies on economies of scale and competes in cost, high-quality, low-cost and stable supply of raw materials will become one of the main factors hindering the future competitiveness of photovoltaic glass companies.