TCL Technology invests 2.5 billion yuan in polysilicon to advance strategic coordination within the industrial chain

With the rise in polysilicon prices, it is crucial for TCL Technology’s new energy photovoltaic and semiconductor materials business to ensure a stable long-term supply and reduce supply chain costs. At the beginning of 2021, Tianjin Huanrui Electronic Technology Co., Ltd., a subsidiary of TCL Green Energy, signed a long-term framework agreement on polysilicon purchase and sale with GCL-Poly Energy Holdings Co., Ltd., under which it agreed to purchase a total of 350,000 tons of polysilicon materials, including granular silicon, from GCL-Poly between January 2022 and December 2026. Today, TCL Technology has joined forces with GCL to enter the polysilicon industry. Its wholly-owned subsidiary, Tianjin Silicate Materials Technology Co., Ltd., plans to sign a joint venture agreement with Jiangsu Zhongneng Silicon Industry Technology Development Co., Ltd. to jointly establish a new company named Inner Mongolia Xinhuan. This company will be engaged in the production of around 100,000 tons of granular silicon and silicon-based materials, as well as in research and development activities related to downstream applications. The registered capital of Inner Mongolia Xinhuan is set at 4.5 billion yuan, with Tianjin Silicate Materials contributing 1.8 billion yuan and holding a 40% stake in the company. Tianjin Silicate intends to sign a capital increase agreement with Jiangsu Xinhua Semiconductor Technology Co., Ltd. and Inner Mongolia Xinhua Semiconductor Technology Co., Ltd., in order to launch a project for producing 10,000 tons of electronic-grade polysilicon. Tianjin Silicate will invest 720 million yuan in Inner Mongolia Xinhua, while Jiangsu Xinhua will invest 980 million yuan; as a result, the registered capital of Inner Mongolia Xinhua will increase to 1.8 billion yuan, with Tianjin Silicate holding 40% of the shares. TCL Technology and its partners have already engaged in investment collaborations on projects related to polysilicon materials and single-crystal rod production; this project will further strengthen these partnerships, improve coordination of resources across the supply chain, and lay a solid foundation for increasing the production capacity of new energy photovoltaic products as well as expanding their market share. Meanwhile, with the rapid growth of the domestic semiconductor market, demand for electronic-grade polysilicon is expected to continue rising. TCL Technology and Jiangsu Xinhua have maintained a long-term partnership in areas such as electronic-grade polysilicon and large-scale semiconductor wafers; this project will further strengthen the company’s position in the field of semiconductor materials. TCL Technology states that the construction of these projects will enable the company to establish a business presence in the upstream core materials sector related to new energy photovoltaics and semiconductor materials. This will help achieve strategic cost reduction through coordinated efforts across the supply chain, enhance supply chain stability, and support the company’s goals of becoming a global leader in new energy photovoltaics as well as advancing its strategies in semiconductor materials.