Tongwei Turned Lossmaking as Polysilicon and Solar Cell Prices Fell

Tongwei positions itself as the global leader in polysilicon production, making about 27% of domestic supplies in 2023. Tongwei benefitted from the shortage in supplies in 2021 and 2022, but this has now led to excess capacity in the industry. Despite the overcapacity, Tongwei is pressing on with its capacity expansion plan to defend its market share. We think Tongwei will remain profitable given its cost advantage, but returns on investment and profit margins will be dampened.