REC Silicon Shifts Focus from Polysilicon to Silicon Gases Amid Production Challenges

REC Silicon pivots from polysilicon to silicon gas production amid quality challenges and market shifts.
REC Silicon

REC Silicon, a Norway-based manufacturer, is halting its efforts to produce solar-grade polysilicon at its Moses Lake, Washington facility due to persistent quality issues, pivoting to focus on the production of silane gas, a strategic shift reflecting changes in market demands and internal capabilities.

Production Shift Due to Quality Challenges

Initially, REC Silicon aimed to resume polysilicon production supported by a significant investment from South Korean solar panel producer Hanwha Qcell in 2022, which included a 10-year offtake agreement. However, despite several attempts to enhance the quality of the polysilicon, REC faced continuous challenges in removing key impurities. The product ultimately failed a qualification test in December, leading to decision of shutting down the polysilicon production line. The first deliveries were consistently delayed throughout 2024, failing to meet the high purity standards required for solar cell production.

Strategic Refocus on Silicon Gas Production

With the closure of the polysilicon segment, REC Silicon is now redirecting its focus towards the production of silicon gases, particularly silane, which is used in the manufacture of silicon anodes for batteries. This move is expected to better align with the evolving market dynamics, especially as the demand for battery materials increases. REC Silicon's shift is timely, considering the reduced potential customer base in the U.S. for solar-grade polysilicon, exacerbated by the doubling of U.S. tariffs on polysilicon imports from China.

The company anticipates the shutdown process will take approximately three months, during which it will maintain the necessary equipment for silicon gas production. This strategy not only saves costs but also allows for operational flexibility, enabling the company to potentially restart or scale operations based on future market needs.

In September, REC signed a significant contract to supply silane to Sila Nanotechnologies from the first quarter of 2025 through to 2031. Sila Nanotechnologies also holds contracts with major firms like Mercedes-Benz and Panasonic, indicating a strong upcoming demand for REC's silicon gas products.

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