09 March 2007
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Polysilicon supply will remain tight until 2008, according to research by JP Morgan in a September 2006 research report. The equity firm attributed the cautious expansion to the vast investment involved and the experience of vicious oversupply in 1998. JP Morgan further noted that most polysilicon vendors require stringent long term contracts with favorable pricing agreements before they start building new capacity under the mentioned considerations.
| Polysilicon supply-demand analysis, 2003-2008 (metric tons) | ||||||
|
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 |
| IC semi demand | 17,000 | 19,350 | 20,500 | 22,000 | 23,500 | 25,100 |
| Solar demand | 9,000 | 11,000 | 16,500 | 22,170 | 25,939 | 33,072 |
| Supply | 26,700 | 28,800 | 31,000 | 36,330 | 45,250 | 58,350 |
| Surplus/(Shortage) | 700 | (1,550) | (6,000) | (7,840) | (4,189) | 178 |
Source: JP Morgan, complied by DigiTimes.com, March 2007
Digitimes does point out that there is an alternative sort of silicon available and that this is a LOT cheaper:The persistent shortage of polysilicon is now prompting solar cell makers to seek substitutes such as metallurgical-grade silicon as alternative raw material. This trend is growing obvious and industry players are aware of the potential development as this may pose structural changes to the industry.[...]
According to a US Geological Survey's mineral commodity summaries report, metallurgical-grade silicon cost about US$ 0.77 per pound in 2005. Polysilicon prices have been rising by 22-33% each year since 2003, according to Prometheus Institute as cited by a Macquarie Research January 2007 report. The equity firm also cited the institute in saying that polysilicon prices may continue to rise to US$60 per kg, representing a 9% on year increase in 2007.
Starting from 2007, more solar cell makers will apply metallurgical-grade silicon as the sole raw material for solar cells, instead of mixing it with conventional polysilicon, according to industry players. They noted that 2007 will be a pivotal year concerning the trend of metallurgical-grade silicon, as once this silicon is applied in solar cells on a large scale, the entire solar cell industry will to see fundamental changes.
Industry players are generally open to adopting new raw materials and there are a growing number of players who have commenced testing the production of silicon wafers from metallurgical-grade silicon. However, they also noted that many of these silicon wafers are below standard at the current stage.
If the metalurgical silicon only solution works then we will see prices fall and, presumably, an expansion in solar power. If it doesn't then there is another word we are looking for regarding plans to generate lots of solar power. The word begins with F and rhymes with "ducked".
