Fuju Solar declares bankruptcy, Taiwan's polysilicon production capacity may be completely cut off

Fuju Solar, a subsidiary of Lee Chang-Yung Chemical (LEC), has debts of NT$12 billion (the same below) and insufficient assets to pay. Today (13), the board of directors approved a bankruptcy application. Fuju's bankruptcy and the difficulty of expanding Powertech's production capacity mean that Taiwan's solar-grade polysilicon production capacity has been completely cut off.

Wu Xianjin, general manager of Fuju Solar, held a press conference at the Taiwan Stock Exchange on the 13th to announce the bankruptcy news. He said that Fuju Solar's total assets last year were 2.28 billion yuan, while its liabilities were as high as 14.308 billion yuan, and its shareholders' net equity was negative 12 billion yuan, making it difficult for the company to pay its debts. Fuju's losses also caused Ronghua, its parent company that holds 64.87% of the shares, to suffer a net loss of 8.327 billion yuan after tax last year, and a loss per share of 9.76 yuan after tax, the largest loss in history. After Fuju declared bankruptcy, Ronghua's operations are expected to stabilize.

Wu Xianjin pointed out at the press conference that Fu Ju had applied to the court for reorganization on April 7 but was rejected, and then filed a protest on April 15; the board of directors decided to declare bankruptcy, so Fu Ju will withdraw the protest first, and then formally apply for bankruptcy to the court, and then handle related matters according to the court's approval. At present, all Fu Ju assets, including production lines, have been mortgaged to creditor banks, and only 20 of the existing 123 employees will be left for the necessary production line and security personnel.

Taiwan still has another solar manufacturer that has entered the polysilicon field, Powerleader Energy. However, although Powerleader has a complete production line, it encountered a period of sharp decline in polysilicon prices after the completion of the factory. In addition, this year coincides with the production capacity of major solar polysilicon manufacturers to increase again. Given that Taiwan does not have a cost advantage in producing polysilicon, Powerleader may find it difficult to actually start production. Therefore, the bankruptcy of Fuju Solar is equivalent to announcing the official severance of the upstream of Taiwan's solar supply chain.

This year, many Chinese polysilicon manufacturers have significantly expanded their production, and international polysilicon giants such as OCI and Tokuyama have increased their production capacity again, making the imbalance between supply and demand of polysilicon even more serious. The price has fallen by nearly 20% since the beginning of the year. The price trend of polysilicon in the second half of the year still depends on the actual impact of China's suspension of the processing trade manual. It is expected that the price of polysilicon in China and other overseas markets will diverge.