On January 24, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Environmental Protection jointly issued the "Polysilicon Industry Access Requirements" (hereinafter referred to as "conditions"). The conditions stipulate that the polysilicon project should be in line with the national industrial planning, land use policy, and industry development rules. The new polysilicon project will no longer be approved in principle until the new directory for approval of government investment projects is issued. However, projects that need to be built to strengthen technological innovation and promote energy conservation and environmental protection shall be submitted to the competent investment department of the State Council for argumentation and approval.

Founder Securities analyst Deng Xinrong told the "Securities Daily" reporter on January 26th that the "Conditions" jointly issued by the ministries and commissions aimed to raise the threshold of the polysilicon industry and increase industry consolidation efforts to eliminate backward production capacity.

At present, for the polysilicon industry, the threshold is focused on the scale of production, energy consumption and resource recovery. In terms of production planning, the solar polysilicon project requires a size of more than 3,000 tons per year, and the semiconductor-grade polysilicon project has a scale of more than 1,000 tons per year.

In terms of energy consumption and resource recovery, the reduction power consumption of solar grade polysilicon is less than 80 kWh/kg, the reduction power consumption of semiconductor-grade Czochralski polysilicon is less than 100 kWh/kg, and the melting polysilicon used in the zone is less than 120 kWh/kg. Among the reduction gases, the recycling efficiencies of silicon tetrachloride, hydrogen chloride, and hydrogen were respectively not lower than 98.5%, 99%, and 99%. In addition, requirements have also been made on the project area, environmental impact, and the proportion of investment capital.

"Conditions" aims to eliminate backward production capacity Deng Xinrong pointed out that after the "condition" is introduced, the polysilicon industry may usher in a round of integration. Some small, low-tech polysilicon production capacity will be eliminated. The production capacity with cost and technology advantages will be more stable in the market, and the industry structure may be closer to large-scale, high-quality enterprises. Due to the restrictive role of the "conditions", new production capacity or the need to pass the approval of the increase in the growth rate of polysilicon in 2011 or will slow down.

“We should recognize that in 2009, the polysilicon industry was repeatedly pointed out by experts as showing excess capacity, but due to policies that led to the European PV market and its boom in 2010, in the middle of 2010, there was a serious shortage of polysilicon in China, and the spot price was once Elevated to 100 US dollars / kg." The analyst said to reporters.

According to China's customs data, in the first 11 months of 2010, imports of polysilicon were nearly 42,000 tons, accounting for about half of the total domestic demand. This shows that domestic supply does not satisfy demand. “Overcapacity” does not actually exist, but the surplus is backward production capacity. However, after prices return to normal, the backward production capacity is insufficient, and it will be eliminated by the market.

At present, the application of crystalline silicon is mostly concentrated in the solar energy industry, and monocrystalline silicon and polycrystalline silicon have already played an enormous role. From the perspective of industrialization, the center of gravity has evolved from single crystals to polycrystals. Due to the issuance of the "Conditions," the effect on the A-share polysilicon listed companies is unclear. The downstream manufacturers will enter the long-term channel of volume-for-price changes. Due to the integration stage, the profit growth momentum will gradually slow down, and integrated manufacturers with scale advantages may win the cost competition.

From the point of view of the industrial chain of production, domestic manufacturers have obvious cost advantages in terms of battery components. From the aspect of cost integration, the integration of silicon-battery-components will be a trend for downstream manufacturers. In the next five years, the integration of the solar energy market will leave manufacturers with cost advantages, and the manufacturers who have laid out the entire industrial chain will have obvious advantages in cost reduction compared to those who specialize in the individual sectors.

Among the A-share related listed companies, solar-related listed companies have technological advantages including Tianwei Change (21.28, 0.57, 2.75%) (600550. SH), and TBEA (18.71, 0.97, 5.47%) (600089. SH), CSG A (18.60, 0.52, 2.88%) (000012 SZ), aerospace electromechanical (11.96, 0.26, 2.22%) (600151.SH), Chuantou Energy (14.62, -0.05, -0.34%) ( 600674.SH), Leshan Electric (12.06, 0.18, 1.52%) (600644. SH) and so on.

Many listed companies said they are assessing the impact of the reporter's January 26 call to a number of listed companies, and interviewed relevant sources said that the Spring Festival approaching, the company's busy things, "conditions" was just announced on January 24, the company is currently The impact assessment is still unclear.

However, according to the reporter’s understanding, most of the listed companies interviewed are mostly companies with high production capacity and high quality in the polysilicon industry in China. Therefore, the impact will not be great. As for some companies that are preparing to put into production new projects, the May be limited.

According to the survey, the polysilicon industry plans to invest a total of 134 billion yuan, the actual investment of 47 billion yuan; has been completed project design capacity of more than 40,000 tons, the project under construction design capacity of more than 60,000 tons.

The industry believes that the introduction of polysilicon entry barriers will cause a reshuffle in the industry. The introduction of the "Conditions" shows that the supervisory layer has integrated the polysilicon industry's attitude. Although it has just been announced, it is foreseeable that the reshuffle will proceed from reusable and backward production capacity.