Wacker polysilicon sales dip as customers walk away from PV

Wacker Chemie – the Munich-based chemicals giant and the world’s second-largest maker of PV-grade polysilicon – says its operating profit fell more than 21% last year as a number of its solar customers exited the industry.

Despite another record-breaking year for global PV additions, driven in large part by an end-of-year spurt of demand, Wacker’s polysilicon division saw its fourth-quarter sales drop 32% to €255m ($335.8m).

“The decline in semiconductor and solar demand was stronger than we had expected, and caused Q4 figures to come in below our estimate,” says chief executive Rudolf Staudigl.

Wacker says many of its customers were busy clearing their bloated inventories, while many others simply walked away from the PV game altogether – lending credence to the notion that dozens of polysilicon producers are likely to disappear over the next few years.

Though Wacker claims sales have risen since the new year, even the world’s largest producers are likely to face intense margin pressures as global polysilicon capacity continues to balloon.

Wacker kicked off production at a new plant in Nunchritz, Germany last autumn, and is building another plant in Tennessee that will employ 650 when it goes live in 2014.

Other players, such as LDK Solar, are adding massive amounts of new capacity, despite predictions that polysilicon prices will continue to plummet as demand for PV products levels off over the next few years and module makers find ways to use less raw materials.

Wacker was only narrowly behind Korea’s OCI last year in terms of total polysilicon production, with the two rivals producing 33,885 and 34,725 tonnes respectively – equivalent to a 12% market share apiece.

Wacker is considered one of the industry’s “big four” polysilicon manufacturers – alongside OCI, Hemlock and GCL-Poly, the latter two each taking an 11% market share last year, according to GTM Research.

Not far behind was Norway’s REC (7% market share), followed by MEMC (5%) and LDK Silicon (4%).

But beyond the first and second tier players are a constellation of smaller manufacturers that piled into the industry during the demand boom several years ago.