TONGWEI Co., the world’s largest maker of polysilicon that is a key material for solar panels, plans to build a massive new factory in northern China, the company’s fourth project in 2023 that is above 10 billion yuan (US$1.40 billion).

Tongwei signed an agreement with local authorities in Ordos, Inner Mongolia, to invest 28 billion yuan in a two-phase project that will eventually have capacity to produce 500,000 tons of industrial silicon and 400,000 tons of polysilicon annually, the Shanghai-listed company said in a stock exchange filing Monday.

The first phase of the project will cover capacity of 200,000 tons each for industrial silicon and polysilicon, to be completed by the end of December 2025, Tongwei said.

The investment to build the new plant won’t have significant impact on the company’s revenue and net profit for 2023 and 2024, Tongwei said.

Tongwei’s investment comes just as the industry struggles with a price war and a looming wave of consolidation.

Tongwei’s new plant is designed to benefit from low raw material costs and will start to serve the market in 2026, once the sector has recovered from the current round of consolidation, the company said in a separate statement.

Tongwei forecasts global solar installation demand to grow 20% in 2024, mainly driven by strong demand from the Middle East and Africa. It estimates 20% growth from the United States and around 10% growth from Europe next year, Citi analysts said in a note.

(SD-Agencies)