Top Chinese polysilicon producers plan $7 billion fund to cut capacity and set output quotas
China’s largest polysilicon producers are preparing to take drastic measures to curb overcapacity and stabilize the struggling sector, according to GCL Technology Holdings. The companies are in talks to form a 50 billion yuan ($7 billion) acquisition fund aimed at shutting down approximately one-third of the country’s production capacity and implementing OPEC-style output quotas.
GCL, one of the top producers, told Reuters that the plan involves acquiring and dismantling at least one million metric tons of low-grade polysilicon production. The move comes as the solar industry grapples with severe overcapacity and price wars that have eroded profits across the sector, News.Az reports, citing Reuters.
Jun Zhu, GCL’s investor relations director, likened the initiative to an “OPEC of the polysilicon industry,” where total output would be regulated by a central committee and production quotas distributed among participating firms. The goal is to ensure price stability and eliminate inefficient operations, aligning with Beijing’s recent push to end “disorderly price competition.”
At the end of 2024, China’s total polysilicon production capacity stood at 3.25 million tons, according to Bernreuter Research. The proposed closures would eliminate roughly 38% of that capacity, leaving around 2 million tons in operation. Industry-wide efforts to consolidate production gained traction after President Xi Jinping in early July called for a halt to cutthroat pricing and the retirement of outdated manufacturing lines. The Ministry of Industry followed suit days later, pledging to support restructuring efforts.
Polysilicon prices have surged nearly 70% in recent weeks, reflecting market anticipation of these supply-side reforms. GCL Chairman Zhu Gongshan had previously hinted at restructuring plans during a solar industry conference in June, though this is the first time the full scope, timeline, and financial backing of the plan have been reported.
Jun Zhu confirmed that the acquisition platform is expected to launch in the third quarter of 2025 and begin purchasing excess capacity and market inventories in the fourth quarter. The fund’s central committee—composed of polysilicon producers, creditors, and potentially government regulators—will aim to maintain prices within a stable, mutually beneficial range.
China’s National Development and Reform Commission has not yet responded to requests for comment on the proposed industry-wide plan. The initiative signals one of the most concrete steps yet in Beijing’s effort to restructure oversupplied sectors and promote more sustainable growth in key industries like solar energy.
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