OCI’s Vietnam Solar Wafer Plant to Start Full-scale Operations Next Month

OCI Group’s solar wafer production facility in Vietnam, Neo Silicon Technology, will begin full-scale operations next January. OCI Group plans to mass-produce non-Chinese wafers through the Vietnam plant to actively target the U.S. market, where large-scale solar projects are underway.

According to industry sources on Dec. 25, Neo Silicon Technology has completed all preparations for full operation in January and is currently undergoing preliminary operations. Previously, OCI Terasas, the Malaysian subsidiary of OCI Holdings, acquired a 65% stake in Neo Silicon Technology through OCI One, a special purpose company established in September. With the authorities’ approval of the merger and acquisition (M&A) deal early this month, OCI One has become the largest shareholder of Neo Silicon Technology.

OCI Holdings plans to use the entire polysilicon output from OCI Terasas at Neo Silicon Technology to mass-produce non-prohibited foreign entity (Non-PFE) wafers. Products from a prohibited foreign entity (PFE) are those produced or procured by companies belonging to foreign countries of concern designated by the U.S. government, such as China, Russia, Iran, and North Korea. These products are not only excluded from benefits like U.S. subsidies and tax credits but must also bear high tariffs.

In response, OCI Holdings has established a complete non-Chinese solar supply chain through vertical integration, spanning polysilicon (OCI Terasas) — wafer (Neo Silicon Technology) — cell/module (Mission Solar Energy). Neo Silicon Technology’s annual wafer production capacity is 2.7 GW (gigawatts), and it is known that this capacity can be doubled to 5.4 GW within six months with additional investment. Mission Solar Energy, OCI Holdings’ Texas subsidiary, which received a $265 million (approximately 380 billion won) investment, is also scheduled to establish a mass production system of over 2 GW for cells by the second half of next year.

While the global solar wafer market is experiencing a severe oversupply due to the influx of Chinese products, the demand for non-Chinese products is surging in the largest market, the United States, due to sanctions. In fact, in the North American and European markets, non-PFE certified wafers are trading at a 20-50% premium compared to their Chinese counterparts.

Notably, the U.S. plans to fully implement PFE regulations related to solar subsidies starting next year. Consequently, products that pass through Chinese-affiliated companies or use Chinese raw materials will not be eligible for subsidies under the Inflation Reduction Act (IRA), and these standards are set to be further tightened until 2029. The U.S. recently imposed high countervailing duties on products that use Chinese cells and wafers, are processed in third countries such as Cambodia, Thailand, Vietnam, and Malaysia, and then exported to the U.S. Investigations are also underway for Indonesia, Laos, and India.

OCI Group intends to actively respond to the demand in the high-growth U.S. solar market based on its Non-PFE production system. According to the global market research firm Market Research Intellect, the U.S. solar wafer market is projected to grow from $8.6 billion (approximately 12.48 trillion won) this year to $18.9 billion by 2033. Meanwhile, the U.S.’s own ingot and wafer production capacity is around 20 GW, accounting for only 1-2% of the global total. An industry official stated, “Since the U.S.’s own production capacity cannot keep up with demand, the supply shortage of (non-PFE solar products) will inevitably continue.”