Silicon Production Faces Pressure as Cell Production Falls Short of Expectations

Silicon Material Faces Pressure and Load Reduction; Battery Production Falls Short of Expectations (May 9, 2025)

As of the end of April, the output of silicon materials reached approximately 102,000 tons. However, the industry continues to grapple with high inventory levels affecting operations. While overall silicon inventory has slightly decreased, this reduction primarily stems from the consumption of stock held by crystal pulling manufacturers. Post-May Day, the pace of procurement from buyers has slowed, leading to a situation where silicon inventory remains concentrated within the manufacturers. Consequently, silicon producers faced significant pricing challenges, with new order placements becoming increasingly difficult. In light of these circumstances, silicon manufacturers in China have entered a state of reduced production in May. Some smaller manufacturers have initiated maintenance ahead of schedule, resulting in a projected decrease in polycrystalline silicon output to about 97,000 tons, which translates to approximately 48.5 GW based on a consumption rate of 2,000 tons/GW. The output of granular silicon (FBR) is expected to be around 20,000 tons, accounting for roughly 10.3 GW and representing about 21-22% of the total monthly output. Additionally, many manufacturers have postponed their planned production expansions.

In April, the production of silicon wafers reached about 61 GW, reflecting a nearly 15% month-over-month increase driven by rising downstream demand. While leading manufacturers maintained good operational rates, second- and third-tier companies also performed well due to customer demand and contract orders. For May, the expected monthly output is around 59 GW. In terms of wafer distribution, the 183N segment is anticipated to account for 36-37%, 210R N is projected at 30-31%, and 210N is expected to fall between 25-27%.

In April, the output of battery cells was approximately 67.6 GW, but the expected output for May is forecasted to be 61.7 GW, a decrease of 9% month-over-month. In terms of technology, the TOPCon technology is expected to dominate in May, comprising about 91% of production, while PERC, HJT, and BC technologies will account for 4%, 1%, and 5%, respectively. The decline in terminal demand in April led to a significant drop in battery cell prices, although only a few manufacturers have explicitly reduced their production plans for May; most continue to operate at high capacity rates. Overall, the reduction in battery cell production is not as significant as anticipated, and prices are likely to continue declining.

In Southeast Asia, the production of some manufacturers has decreased due to the impact of the U.S. tariffs introduced in April and the final ruling on anti-dumping measures affecting four Southeast Asian countries. Conversely, manufacturers from non-affected countries have maintained stable operational rates. A noticeable change in production is not expected until July, once the 90-day grace period for tariffs concludes.

In April, the component production surged significantly, reaching approximately 60.7 GW, which is a nearly 13% month-over-month increase. Despite a gradual contraction in demand by late April, component production is expected to remain high at around 60 GW in May. However, market feedback for June indicates that order conditions are unclear, and production may be adjusted downward. Internationally, component production in the four Southeast Asian countries remains stable. As long as the combination of “low-tax batteries and components from the four countries” can continue to enter markets smoothly, there are no signs of significant production line eliminations. Additionally, recent months have seen a notable increase in component production in India, reaching close to 4 GW per month, with some companies utilizing batteries sourced from Southeast Asia to mitigate local import tariffs.