US House Committee Seeks Clarification on TCL Zhonghuan's UFLPA Status

September 25, 2023

The U.S. House Select Committee on the Chinese Communist Party asked U.S. cabinet officials Sept. 19 to determine whether China-based solar wafer maker TCL Zhonghuan, among 24 other entities, should be subject to the Uyghur Forced Labor Prevention Act (UFLPA).

In a letter addressed to Secretary of State Anthony Blinken and Secretary of Homeland Security Alejandro Mayorkas, the committee asked that both determine by Oct. 6 the 25 entities meet the criteria for sanctions under the UFLPA.

TCL Zhonghuan is the world's second-largest solar wafer maker. Other entities named in the letter include metals mining, textile and footwear companies, among others.

"We are writing to request that you rigorously enforce the Uyghur Human Rights Policy Act (UHRPA)" and the UFLPA," the committee said. Both laws require "the perpetrators involved in human rights abuses and forced labor" connected with the Xinjiang Uyghur Autonomous Region (XUAR) in China be determined for sanctions, according to the letter.

The UFLPA, which was signed into law in Dec. 2021, assumes that goods whose supply chains overlap with the XUAR have been made with forced labor, and cannot enter the U.S. market.

China's foreign ministry has described allegations of forced labor in XUAR as "vicious lies concocted by anti-China forces" and said that UFLPA "seriously violates international law and basic norms governing international relations". TCL Zhonghuan "sources XUAR-produced polysilicon and owns 30%" of a polysilicon manufacturer in Xinjiang, according to a Sheffield Hallam University report last month.

The House committee's mention of TCL Zhonghuan, which ended 2022 with 140 gigawatts (GW) of wafer capacity and eyes 180 GW of it by the end of this year, comes at a time when the U.S. is scrutinizing its solar value chain for connections to China while building up its own domestic solar supply chain. 

The U.S. Department of Commerce announced last month that five solar companies tried to avoid paying U.S. tariffs on China-made solar cells and modules by processing their products in Southeast Asia before shipping them to the U.S.

Reporting by Nicholas Lua, 
Editing by Hanwei Wu,

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Wacker Chemical CEO Addresses Challenges Facing Polysilicon Industry

September 13, 2023

LAS VEGAS -- A limited domestic market and price volatility for the solar supply chain's raw material are among challenges faced by polysilicon makers when considering expansion in the U.S., David Wilhoit, president and chief executive officer of Wacker Chemical Corporation, told OPIS Tuesday.

"I didn't see a lot of ingot or wafering announcements in the U.S. And so that's the challenge for Wacker as well as the other two polysilicon suppliers" in the country, said Wilhoit on the sidelines of clean energy event RE+ in Las Vegas. His firm is the U.S. subsidiary of Wacker Chemie AG, a major producer of
solar polysilicon outside China.

"If there is no access to a domestic market, it is a difficult financial situation to expand further," he said. Polysilicon is made into ingots, then sliced into wafers before further processing turns them into solar modules.

"Historically, pricing for poly had been below re-invest point. It did have a resurgence in the past couple of years, now it's coming back down again," Wilhoit said. "There's still a delta between Western poly and China poly, but the trend is going toward the point where we have to make business decisions."

Polysilicon manufactured outside China, currently assessed in the OPIS APAC Solar Weekly Report as GPM, has fallen 30% since its November record high last year to $29.28/kg on Sept. 12. OPIS, meanwhile, assessed polysilicon in China, or China Mono Grade, at 82.5 yuan/kg ($11.43/kg) the same day.

These concerns flag how developing the segment furthest upstream in the U.S.' solar value chain remains a challenge for the country. Polysilicon factories require significant capital expenditure to build and can involve substantial prepayments and long offtake agreements signed with buyers who may not be keen to bite.

Wacker's Tennessee plant, which has an annual nameplate capacity of 20,000 metric tons for polysilicon, is the firm's "largest single investment ever," totaling some $2.5 billion, according to the company website. REC Silicon, which aims to restart its 16,000 mt/year polysilicon plant at Moses Lake,
Wash., this year, said last week it signed a 10-year supply agreement estimated at around $3 billion with Hanwha Q Cells Georgia.

While the Inflation Reduction Act, a sprawling federal bill passed in 2022, hands out incentives to support domestic solar manufacturing mainly by way of tax credits, much of that funding is going to downstream segments like module production.

"If you look at the benefit of the IRA in the supply chain, poly didn't probably lobby enough," Wilhoit said at an RE+ panel Tuesday. "And so the incentives isn't great." Manufacturers stand to gain $3 of federal tax credit per kilogram of solar-grade polysilicon made in the U.S.  

When asked if Wacker is planning for a capacity expansion at its Tennessee plant, Wilhoit told OPIS, "There is nothing in our concrete plans right now. But we're actively involved in discussions with the industry, with the government."

The Tennessee site has "the land and the vision" to support an expansion, he added. "If the market forces support it, we would expand."

Hemlock Semiconductor, the third polysilicon supplier in the U.S., has 35,000 mt of annual production capacity in Michigan, according to a 2022 U.S. Department of Energy report.  

Wacker Chemie's total annual polysilicon production at its U.S. and Germany plants is 80,000 mt, its website said.

($1.00 = 7.22 yuan)

Reporting by Nicholas Lua,
Editing by Michael Kelly,

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