Overview of the trichlorosilane market in China

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Current status of silicon trichloride production in China: In recent years, the production of silicon trichloride in China has developed rapidly; in 2004, the total annual production capacity was 4,280 tons, with only 4 manufacturing enterprises operating at that time. By 2005, the total production capacity had reached 22,000 tons per year, with output of around 12,000 tons; there were 14 manufacturing enterprises, of which 6 had a production capacity of over 2,000 tons per year. The total production capacity in 2006 was approximately 30,000 tons. Due to the continuous strong demand for trichlorosilane products over the past two years, rising prices, substantial profits, and low investment requirements, it is a typical \"short-term, low-effort, high-return\" project. As a result, between 2006 and 2007, a large number of trichlorosilane manufacturers expanded their production capacity, and new companies entered the industry competition. Currently, the market price of trichlorosilane in China ranges from 14,000 to 16,000 yuan per ton, while the ex-factory price is around 12,000 to 13,000 yuan per ton. The number of manufacturers has increased from less than 10 to over 20 at present, and their production capacity exceeds 30,000 tons per year. The silicon trichloride producers in our country are mainly located in Jiangxi, Tangshan in Hebei, Chongqing in Sichuan, Wuhan in Hubei, and Shanghai. Currently, the major domestic producers or production areas of trichlorosilane include Tangshan Sanfu, Sichuan Yongxiang (expansion project), Hubei Jingzhou (expansion project), Jiangxi Ganzhong (expansion project), Zhejiang Kaihua (new project), and Henan Sanmenxia (new project). The main domestic manufacturers are listed in Table 2, while the trend in production capacity and output of trichlorosilane in China is shown in Figure 2. Table 2: Capacity Statistics of Major Trichlorosilane Producers in China (tons/year)
Serial Number | Manufacturer | Current Capacity | Planned Capacity | Remarks
1 | Tangshan Sanfu Silicon Industry Co., Ltd. | 12,000 | 60,000 | Target: 100,000 tons/year
2 | Hubei Jingzhou Huaxiang Chemical Co., Ltd. | 3,000 | 13,000 | To be expanded to 15,000 tons/year
3 | Henan Sanmenxia Jinyou Chemical Company | 0 | 12,000 | Under construction
4 | Sichuan Leshan Yongxiang Resin Co., Ltd. (joint venture between Tongwei Group and Sichuan Giant Star Group) | 5,000 | 20,000 | Integrated with polysilicon production
5 | Jiangxi Ganzhong Chlor-Alkali Manufacturing Company (Changshu) | 3,000 | 7,000 | To be expanded to 10,000 tons/year
6 | Zhejiang Kaihua Synthetic Materials Company | 10,000 | 0 | Scheduled to start operations by the end of 2007
7 | Xuzhou Zhongxing Chemical Co., Ltd. | 0 | 10,000 | Environmental impact assessment already completed
8 | Zhejiang Xin’an Chemical Group Co., Ltd. | 3,000 | 7,000 | To be expanded to 10,000 tons/year
9 | Sichuan Leshan Fuhua Pesticide Technology Co., Ltd. | 0 | 20,000 | Approval already obtained
10 | Zhejiang Jiemaa Chemical Co., Ltd. | 0 | 10,000 | Under construction
11 | Henan Coking Coal Group Co., Ltd. | 0 | 40,000 | Planned; integrated chlor-alkali production
12 | Henan Luoyang Weiyuan Silicon Micropowder Co., Ltd. | 0 | 6,000
13 | Tangshan Zhongyou Silicon Industry Co., Ltd. | 3,500 | 0
14 | Chongqing Tianyuan Chemical General Factory | 2,500 | 0 | To be expanded to 3,000 tons/year
15 | Chongqing Hongyuan Chemical Company | 2,500 | 500
16 | Hubei Yingcheng Dongcheng Silicone Co., Ltd. | 4,800 | 0 | Scheduled to start operations in 2007
17 | Tangshan Jidong Chlor-Alkali Co., Ltd. | 2,300 | 0
18 | Nanjing Deepus Chemical Co., Ltd. | 4,000 | 0 | Production site unknown
19 | Shanghai Lingguang Industrial Co., Ltd. | 3,000 | 0
20 | Henan Jiaozuo Chlor-Alkali Plant | 3,000 | 0
21 | Tangshan Ouli Petrochemical Co., Ltd. | 2,300 | 0
22 | Jiaozuo Zhongsheng Fine Chemical Co., Ltd. | 2,000 | 0
23 | Wuhan Tianxiang Chemical Co., Ltd. | 2,000 | 0
24 | Nanchang Ganyu Silicone Co., Ltd. | 1,000 | 0
25 | Luoyang Zhongsil High-Tech Co., Ltd. | 1,000 | 0 | For internal use

Total | 69,900 | 205,500

Figure 2: Trend Chart of Trichlorosilane Capacity and Production in China
Trichlorosilane is a key raw material for producing polysilicon, as well as a fundamental material for manufacturing organosilane coupling agents. Silicone products are a class of new chemical materials with excellent and unique properties. Their applications span various fields such as national defense, the national economy, and people’s daily lives. They have developed into a new type of industrial sector that is technology-intensive, capital-intensive, and characterized by high added value; it holds an important position in the national economy, bringing substantial economic benefits to related industries. Trichlorosilane is an important raw material for producing organosilane couplings. By carrying out a synthetic reaction between trichlorosilane and vinyl chloride or chloropropene, followed by distillation for purification, vinyl or propyl-based silane coupling agents are obtained. Silane coupling agents can cross-link with almost any type of material, including thermosetting materials, thermoplastic materials, sealants, rubbers, hydrophilic polymers, and inorganic materials. They play an important role in applications such as solar cells, glass fibers, reinforced resins, precision ceramic fibers, and fiber protection films, serving as an indispensable element in these industries. Silicon tetrachloride is an extremely important raw material in the production of trichlorosilane, and it also has a large market demand. China’s silicone industry has only begun to develop in recent years; manufacturers of silicone products have sprung up like mushrooms after rain, scattered across the country. The demand for silane coupling agent products in China is growing rapidly; in recent years, the annual growth rate of China’s silicone industry has been 30%, with a swift increase in the demand for trichlorosilane. Although the demand for trichlorosilane surged, thanks to the rapid expansion of domestic production capacity, a balance between supply and demand was largely achieved by 2005; however, some high-quality products still needed to be imported. In recent years, the supply and demand trends of trichlorosilane in China are shown in Figure 3. Figure 3: Trend of domestic production and demand for trichlorosilane. Before 2006, the consumption of silicones for trichlorosilane was dominant; in recent years, the growth of the polysilicon market has led to a rapid increase in the proportion of consumption in this area. At present, polysilicon production in our country is still in its infancy; the polysilicon required by the market relies largely on imports, resulting in a significant supply-demand gap. It is expected that polysilicon production in our country will experience rapid growth over the next five to ten years. It is reported that approximately 3.4 to 3.8 tons of trichlorosilane are required to produce 1 ton of polysilicon; therefore, the rapid development of the polysilicon industry will inevitably drive a sharp increase in the demand for trichlorosilane in China. Polysilicon is a form of elemental silicon. When molten elemental silicon solidifies under supercooled conditions, silicon atoms arrange themselves in a diamond lattice to form numerous nuclei. If these nuclei grow into grains with different crystal plane orientations, then these grains combine together to form polycrystalline silicon. Polysilicon can be used as a raw material for producing single-crystalline silicon, and the difference between polysilicon and single-crystalline silicon lies mainly in their physical properties. For example, in terms of the anisotropy of its mechanical, optical, and thermal properties, it is far less pronounced than single-crystalline silicon ； In terms of electrical properties, the conductivity of polycrystalline silicon crystals is also far less significant than that of single-crystalline silicon, to the point where it is virtually non-conductive. In terms of chemical reactivity, the difference between the two is minimal. Polysilicon is inert at room temperature, but reacts with oxygen, nitrogen, sulfur, and others at high temperatures. In its high-temperature molten state, it exhibits high chemical reactivity and can react with almost any material. It possesses semiconductor properties and is an extremely important high-quality semiconductor material; however, even trace amounts of impurities can **affect its electrical conductivity. A basic material widely used in the electronics industry for manufacturing semiconductor radios, recorders, refrigerators, color TVs, video recorders, computers, and other devices. It is obtained by chlorinating dry silicon powder with dry hydrogen chloride gas under certain conditions, followed by condensation, distillation, and reduction. Market Analysis of Downstream Products of Trichlorosilane Hydrogen Sulfide (1) Silicones: There are currently a large variety of silicone products, with tens of thousands of different types and grades; over 4,000 of them are commonly used. These can be roughly divided into three categories: raw materials, intermediates, and finished products. ★ Silicone monomers: These refer to the monomers used for synthesizing silicone polymers, such as methylchlorosilane, phenylchlorosilane, vinylchlorosilane, and other similar raw materials. 　Although there are many varieties of silicones, their starting raw materials are limited to just a few types of silicone monomers. Dimethyldichlorosilane accounts for the largest proportion, followed by phenylchlorosilane; the former makes up over 90% of the total amount of these monomers. In addition, trimethylchlorosilane, ethyl and propylchlorosilanes, vinylchlorosilane, and the like are also essential raw materials for producing certain types. Organochlorosilanes (methylchlorosilane, phenylchlorosilane, vinylchlorosilane) form the basis of the entire silicone industry, with methylchlorosilane being the cornerstone of this industry. Most silicone polymers are based on polydimethylsiloxane, which is produced from dimethyldichlorosilane as a starting material; other groups such as phenyl, vinyl, chlorophenyl, and fluorinated alkyl groups are then introduced to meet specific requirements. The production process of methylchlorosilane is long and technically challenging; it is a technology-intensive and capital-intensive industry. Therefore, major foreign companies build large-scale manufacturing facilities in specialized plants, while the processing of products takes place in locations spread out according to their intended use and market conditions. ★Silicone intermediates: mainly refer to linear or cyclic siloxane oligomers, such as hexamethyldisiloxane (MM), octamethylcyclotetrasiloxane (D4), dimethylcyclosiloxane mixture (DMC), etc. Various silicone intermediates are obtained from silicone monomers through hydrolysis (or alcoholysis) and cleavage. These silicone intermediates serve as direct raw materials for the synthesis of silicone rubber, silicone oils, and silicone resins, including linear or cyclic siloxane oligomers such as hexamethyldisiloxane (MM), hexamethylcyclotrisiloxane (D3), octamethylcyclotetrasiloxane (D4), and dimethylcyclosiloxane mixtures (DMC). ★Silicone products and goods: Silicone products are obtained by polymerizing intermediates, with the addition of various inorganic fillers or modifying agents. They mainly fall into four categories: silicone rubber (high-temperature vulcanized silicone rubber and room-temperature vulcanized silicone rubber), silicone oil and its processed products, silicone resins, and silane coupling agents. Silicone rubber is then subjected to vulcanization processes such as molding and extrusion to produce end products such as conductive buttons, sealing rings, and swim caps. Silicone rubber is one of the important products among silicone polymers. Among all types of rubber, it has the widest operating temperature range (–100～350°C) and excellent resistance to both high and low temperatures. Silicone rubber can be classified into three main categories based on its vulcanization mechanism: the free-radical crosslinking type initiated by organic peroxides (thermovulcanized type), the polycondensation reaction type (room-temperature vulcanized type), and the addition reaction type. In recent years, with the rapid development of China’s silicone industry. According to statistics, from 2000 to 2006, the apparent consumption volume of the silicone market in our country grew at an average rate of over 30% per year, making it the fastest-growing silicone market in the world. The main domestic producers of silicone are large enterprises such as Lanxing Chemical, Xinan Chemical, Jihua Group, and Jiangsu Meilan, while among foreign companies, there are multinational firms like Corning in the United States, Mattox Advanced Materials in the United States, Wacker Chemie in Germany, and Shin-Etsu Chemical Co., Ltd. in Japan. In the first half of 2007, the price of the silicone intermediate DMC remained at a high level of 26,000–30,000 yuan per ton; raw material prices did not rise in tandem, which greatly enhanced companies’ confidence in entering this industry. Lanxing Chemical is building a 200,000-ton/year silicone monomer project. In July 2007, Xinan Chemical and the American company Mattox Advanced Materials Group announced a joint venture to build a project for producing 100,000 tons per year of silicone monomers. The global silicone giants Dow Corning from the United States and Wacker Chemie from Germany have jointly established a facility in Zhangjiagang to produce 400,000 tons of silicone products per year. In addition, the 200,000-ton/year silicone project of Shandong Dongyue Group and the 100,000-ton/year silicone project of Shandong Jinling Group are also under construction or in the planning stage respectively. At the current rate of construction, by 2010 China’s silicone production capacity will reach 1.5 to 1.7 million tons. The technological level of China’s silicone industry is narrowing the gap with international giants, but innovation still needs to be accelerated. There are nearly ten thousand products in the global silicone downstream industry, while China can only produce a few hundred of them. The global price of silicone monomers is around 40,000 yuan, while in China it is only 13,000 yuan. The global per capita consumption of silicone products is less than 1.5 dollars per year, compared to just 0.75 dollars per year in China. There is therefore great potential for development, and the upstream product, trichlorosilane, also holds promising prospects. (2) Polysilicon At present, crystalline silicon materials (including polysilicon and monocrystalline silicon) are the most important photovoltaic materials, accounting for over 90% of the market share; they will also remain the mainstream materials for solar cells for a considerable period of time to come. For a long time, the production technology for polysilicon materials has been in the hands of 10 factories belonging to 7 companies in the United States, Japan, Germany, and other countries, resulting in a situation of technical blockade and market monopoly. The demand for polysilicon mainly comes from semiconductors and solar cells. Depending on the purity requirements, they are divided into electronic grade and solar grade. Of this, about 55% is used for electronic-grade polysilicon, while 45% is used for solar-grade polysilicon. With the rapid development of the photovoltaic industry, the demand for polysilicon in solar cells is growing at a faster pace than that for semiconductor-grade polysilicon; it is expected that by 2008, the demand for solar-grade polysilicon will exceed that for electronic-grade polysilicon. In 2005, the global supply of polycrystalline silicon for solar cells was approximately 10,448 tons, while the demand for silicon materials used in solar applications was around 22,881 tons. Assuming that the demand for polycrystalline silicon used in solar cells accounts for 65% of the total demand, then the demand for such polycrystalline silicon would be about 14,873 tons. This results in a global market gap of 4,424 tons for polycrystalline silicon used in solar cells. In 2005, there was a shortage of 6,000 tons of polysilicon for semiconductors, and an additional 4,424 tons was missing for solar applications; in total, this amounted to 10,424 tons. The severe supply deficit led to an increase in the prices of polysilicon worldwide. The ongoing growth in the polysilicon market has prompted various manufacturers to announce plans for capacity expansion. Experts predict that the solar photovoltaic industry will surpass nuclear power to become one of the most important primary energy sources in the first half of the 21st century. It is reported that the U.S. Department of Energy plans to achieve a total installed capacity of 4,600 MW by 2010, Japan aims to reach 5,000 MW by that year, and the EU plans to reach 6,900 MW. It is estimated that the world’s total installed capacity will be at least 18,000 MW by 2010. Based on the above speculative analysis, by 2010, the amount of polycrystalline silicon used for solar cells was at least 50,000 tons. According to foreign analysis reports, the world’s polysilicon production in 2005 was 28,750 tons, of which 20,250 tons were of semiconductor grade and 8,500 tons were of solar-grade. The demand for semiconductor-grade polysilicon was around 19,000 tons, resulting in a slight surplus ； The demand for solar-grade polysilicon is 15,000 tons, and supply falls short of this demand. Since 2006, there has been a shortage in demand for both solar-grade and semiconductor-grade polysilicon, with the gap in supply being even greater for solar-grade polysilicon. According to a report by Japanese Rare Metals Impurities dated November 24, 2005, there is a tight demand for polysilicon in the global semiconductor and solar industries, primarily due to the rapid expansion of the solar market centered in Europe. In 2006, the global production capacity for polysilicon was 32,000 tons per year, while the actual demand was 36,000 tons per year, resulting in a shortfall of 4,000 tons per year. It is expected that this imbalance in polysilicon supply will worsen in 2007. The average annual growth rate of solar cells worldwide is expected to be 25% between 2005 and 2010, and by 2010 the total annual global demand for polysilicon used in solar cells will exceed 63,000 tons. The main producers of polysilicon in the world include Tokuyama, Mitsubishi, and Sumitomo in Japan, Hemlock, Asimi, SGS, and MEMC in the United States, and Wacker in Germany. The annual production capacity of most of these companies exceeds 1,000 tons; among them, Tokuyama, Hemlock, and Wacker have the largest production scales, with an annual capacity of 3,000–5,000 tons each. The main technical characteristics of international polysilicon are as follows: ★ Multiple production processes coexist, and the situation of technological barriers and monopolies in industrialization will remain unchanged. Since the primary and auxiliary raw materials used in various polysilicon production plants vary, the production processes and technologies differ as well ； Consequently, there are also differences in aspects such as the technical and economic indicators of polysilicon products, product quality standards, applications, product testing methods, and process safety; each method has its own technical characteristics and trade secrets. Generally speaking, the main traditional processes for polysilicon production internationally include the modified Siemens process, the silane process, and the fluidized bed process. The production capacity of polysilicon manufactured using the improved Siemens process accounts for about 80% of the world’s total capacity, and the situation of technological monopoly and restriction in industrialization is not likely to change in the short term. ★ Research on next-generation low-cost polysilicon process technologies is more active than ever. In addition to traditional processes (compatible with electronic-grade and solar-grade materials) and technological upgrades, several new process technologies have emerged for the specialized production of solar-grade polysilicon, the main one being the low-cost modified Siemens process ； The metallurgical method is used to extract high-purity silicon from metallic silicon ； Direct production of high-purity SiO2 ； Vapor-to-liquid deposition (VLD: Vaper to liquid deposition) ； Reduction or thermal decomposition process ； Chlorine-free process technology, low-temperature preparation of solar-grade silicon from Al-Si alloys ； molten salt electrolysis, etc. China’s polysilicon industry began to develop in the mid-1950s and 1960s, with over 20 production facilities at that time. Due to the high difficulties associated with production technology, small scale of operations, outdated processes, severe environmental pollution, high energy consumption, and high costs, the vast majority of these enterprises suffered losses and thus stopped operating or shifted to other types of production. By 1996, only four companies remained: Emei Semiconductor Materials Factory, Luoyang Monocrystalline Silicon Factory, Tianyuan Chemical Factory, and Lingguang Industrial Company. The total output of these companies that year was 102.2 tons, and their production capacity as well as their technological level were significantly inferior to those of foreign companies. After 1995, Lingguang Industrial Company and Chongqing Tianyuan Chemical Plant ceased production one after another. Currently, the main polysilicon producers in China include Luoyang Zhongsi High-Tech Company, Sichuan Emei Semiconductor Factory, and Sichuan Xinguang Silicon Industry Company. By the end of 2005, Luoyang Zhongsi High-Tech Company’s 300-ton production line was in operation, while the construction of a second phase featuring a 1,000-ton polysilicon production line also began at that time. Henan Province plans to expand this facility to a capacity of 3,000 tons, thereby creating the largest silicon industry base in the country. Sichuan Emei Semiconductor Materials Factory is one of the earliest enterprises in China to possess polycrystalline silicon production technology. The 220-ton polycrystalline silicon production line, expanded with investment from solar cell manufacturers in 2005, is set to go into operation in the first half of 2006. The 1000-ton polycrystalline silicon production line planned by Sichuan Xinguang Silicon Industry Company is under accelerated construction and is expected to be operational by the end of 2006. In addition, there are plans to build production lines in Yunnan, Yangzhou, Shanghai, Heihe, Jinzhou, Qinghai, Inner Mongolia, Yichang, Guangxi, Chongqing, Liaoning, Handan, Baoding, Zhejiang, and other places as well. The development of the polysilicon industry in our country is primarily driven by the growth of the integrated circuit, silicon wafer, and solar cell industries. Our country has become the world’s third-largest producer of solar photovoltaic cells. In 2006, China’s total production capacity for single-crystal silicon ingots and polycrystalline silicon ingots exceeded 10,000 tons. China currently has 58 silicon ingot manufacturers (including those producing monocrystalline and polycrystalline silicon), as well as 38 silicon wafer manufacturers. However, the slicing technology in most enterprises is relatively outdated, and energy consumption is high during the processing process. In order to overcome the constraints posed by high-purity polysilicon on the production of solar photovoltaic products in China, more than 10 companies, including Sichuan Xinguang Silicon Industry Company, have currently invested in projects related to solar silicon materials, with an annual total production capacity of over 50,000 tons. However, Li Zhongming, a researcher at the Beijing Solar Energy Research Institute Co., Ltd., believes that it may not be until early 2008 at the earliest that the operation of these projects will allow us to determine whether China can truly achieve a production capacity of 50,000 tons of high-purity polysilicon. Based on the fact that 11–12 tons of polysilicon are required to produce 1 MW of polysilicon solar cells, in China, by 2004, when the production capacity for polysilicon and monocrystalline solar cells was 70 MW, the amount of polysilicon used had already reached 800 tons. By the end of 2005, China’s solar cell production capacity reached 300 MW, requiring approximately 3,600 tons of polysilicon. In 2006, China’s annual production capacity for polysilicon was only 400 tons, which was sufficient to meet the production needs of 30 MW of solar cells; it is evident, therefore, that there is a huge shortage of polysilicon in China. At present, the larger polysilicon producers or regions in China include Jiangxi Sunwoda (1,600 tons), Xinguang Silicon Industry (1,260 tons), and Sichuan Leshan’s \"Silicon Valley\" (1,500 tons). The status of polysilicon projects under construction and planned in our country is shown in Table 3. Table 3: Enterprises engaged in or planning to engage in polysilicon production in China, along with their production capacities (tons/year). Sequence Number, Enterprise Name, Production Capacity, Remarks: 1. Sichuan Xinguang Silicon Industry Technology Co., Ltd., 1000; production started at the end of February this year. 2 Henan Xuntianyu Technology Co., Ltd.: The 1,000-ton capacity of Phase 1, with a total capacity of 6,000 tons, came online in the first half of this year. The 3 Daquan Group has 6,000 tons of production capacity under construction, with an investment of 4 billion yuan; it is located in Wanzhou, Chongqing (the first phase with 3,000 tons came online in June 2008, while the second phase with 3,000 tons was completed in 2009). 4 Tangshan Silicon Industry Co., Ltd.: 1,000 units under construction, with an investment of 700 million yuan. 5 Dongfang Steam Turbine Factory 1500 under construction, Leshan, Sichuan. 6 Emei Semiconductor Materials Factory: 500 units under construction, Leshan, Sichuan. 7 Leshan Yongxiang Resin Factory: 1,000, under construction, Leshan, Sichuan. 8 Sichuan Yongxiang Silicon Industry Co., Ltd. (a joint venture between Tongwei Group and Giant Star Group): 9,000 tons per year – the project design contract has been signed; the investment amount is 5 billion yuan. By the end of 2009, the production capacity is expected to reach 6,000 tons per year. The facility is located in Leshan, Sichuan. 9 Trina Solar Co., Ltd.: 10,000 – planned (a formal agreement has been signed in ** Province, Jiangsu); investment of $1 billion, located in Lianyungang. 10 Asia Silicon Industry (Qinghai) Co., Ltd.: 1,000 units under construction; investment of $99.8 million. Located in the Xining Economic and Technological Development Zone. 11 Tianwei Baobian in partnership with Sichuan Investment Group and others: 3,000 units planned to be built; investment of 2.7 billion yuan. Located in Xinjin, Chengdu. Total: 40,000