Oil Report

Taiwan's CPC mulls polysilicon plant amid solar boom

TAIPEI, July 9 (Reuters) - State-run CPC Corp., Taiwan [CHIP.UL], is considering investing T$10 billion to build a polysilicon plant to meet soaring demand from domestic producers of solar wafers, a company executive said on Monday.

CPC aimed to produce 3,000 tonnes per year with production expected in 2011, but that would be dependent on approval from parliament, vice president Arthur Kung said by telephone.

Taiwan’s demand this year for polysilicon, which is used in 90 percent of solar cells, will hit 5,000 tonnes, increasing to 11,000 tonnes by 2010, the company said in a statement on its Web site

“We are conducting a feasability study now, after which we can draw up a budget and if everything goes smoothly we can include it on the 2008 or 2009 budgets,” said Kung.

CPC is in talks with foreign manufacturers of polycrystalline silicon for technology transfers, Kung said, but declined to give further details.

Local media had named Hemlock Semiconductor Corp., Tokuyama Corp. and Rec Group as potential partners.

The plant would be located in Taichung Harbor, said Kung.

A shortage of polysilicon has lead solar wafer makers such as Taiwan's largest, Motech Industries 6244.TWO, and E-Ton Solar Tech Co. 3452.TWO to secure supply contracts with overseas makers to ensure smooth production.

And despite many companies expecting a shortage of polysilicon to ease this year, strong demand driven by the rapid growth of photovoltaic manufacturing capacity has kept the market tight. (US$1 = T$32.9)