OCI expands non-China solar supply chain for U.S. market
An aerial photo from a drone shows solar panels on the property of Thelen Materials supply company in Antioch, Illinois, USA. Photo by TANNEN MAURY / EPA
Aug. 27 (Asia Today) — South Korea’s OCI Holdings is accelerating its expansion as U.S. efforts to reduce dependence on Chinese solar supply chains create new opportunities for non-Chinese suppliers.
The company has established a solar materials supply chain linking polysilicon produced in Malaysia with wafers made in Vietnam and is securing long-term contracts with U.S. customers as electricity demand increases with the expansion of artificial intelligence infrastructure.
Industry observers are also watching whether OCI could eventually expand into solar materials for the space industry.
According to OCI Holdings’ semiannual report, its Malaysian subsidiary OCI TerraSus plans to double annual polysilicon production capacity from 35,000 metric tons to 70,000 tons.
The company originally planned to expand capacity to 56,600 tons but increased the target following a shareholders meeting last month.
OCI cited growing power demand from the AI industry, tighter U.S. supply chain restrictions and a widening American customer base as reasons for the additional expansion.
The company also said it had signed a new long-term supply agreement with a U.S. customer.
The expansion is drawing particular attention because OCI has already secured buyers for much of its output.
OCI TerraSus has signed long-term polysilicon supply agreements with Hanwha Solutions and a new U.S.-based customer, among others.
Industry officials view the expansion largely as an effort to meet additional demand after securing customers in advance.
U.S. policies aimed at reducing reliance on Chinese-linked solar supply chains have also opened additional opportunities for OCI.
OCI TerraSus describes itself as Southeast Asia’s only polysilicon producer classified as a non-PFE supplier under relevant U.S. supply-chain rules.
The company obtains electricity through a long-term power purchase agreement with a hydroelectric power plant in Sarawak, Malaysia.
OCI says the tightening of U.S. restrictions on solar supply chains linked to China has increased the value and scarcity of polysilicon produced outside China.
The company is also extending its non-Chinese supply chain from polysilicon into wafers.
OCI ONE acquired a 65% stake in Vietnam-based Neosilicon Technologies in January for about 112.4 billion won, or roughly $81 million.
Neosilicon began commercial production of non-PFE solar wafers in June.
The expansion of AI infrastructure is also creating new sources of demand.
Neosilicon uses non-PFE polysilicon produced by OCI TerraSus to manufacture its wafers.
OCI Holdings said the Vietnamese company signed long-term wafer supply agreements with U.S.-based customers in June in response to growing AI infrastructure investment.
That gives OCI a supply chain stretching from Malaysian polysilicon through Vietnamese wafer production to U.S. customers.
Industry analysts have identified solar materials for space applications as a possible future growth area, although no such expansion has yet been confirmed.
Some market observers have speculated that a recently signed supply agreement could involve a global space company.
They have also pointed to Neosilicon’s efforts to produce thinner wafers and expand production capacity as potentially compatible with future space-industry applications.
“If additional polysilicon supply contracts for space applications are confirmed, OCI Holdings could receive a higher corporate valuation,” Eugene Investment & Securities analyst Hwang Sung-hyun said.
— Reported by Asia Today; translated by UPI
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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260827010009435