The company stated in its latest financial report that investments at its plant west of Charleston are expected to climb about 10 percent to around $2 billion and increase the site’s total capacity at least 10 percent to more than 20,000 metric tons per year.
CEO Rudolf Staudigl said Thursday in a written statement, “From today’s perspective, 2013 will not be an easy year for Wacker. The semiconductor market is currently moving sideways. Polysilicon prices are low, but have bottomed out. At the same time, demand growth is strong among our solar customers. Capacity utilization at our polysilicon plants is climbing fast. If this trend continues, there will be opportunities for higher prices. Our robust chemical business continues to be a key stabilizing factor for the Group.”
According to the report, Wacker expects 2013 first-quarter sales to outperform the 2012 fourth quarter, but fall short of the first-quarter figure set in 2012. This is because polysilicon prices then were almost twice as high as today.
The local increase in investment and production locally comes after the company announced in October 2012 it was delaying production at the new facility by 18 months.
Wacker Polysilicon Site Communications Manager Amanda Plecas said Thursday, “Wacker is using the additional time to optimize production facilities and improve manufacturing processes so the yields are higher.”
Overall, capital expenditures in the entire polysilicon group grew in 2012 by almost 12 percent to $1.4 billion. That compares to $1.3 billion in 2011. The record expenditure in capital funding primarily went toward further capacity expansion for hyperpure polycrystalline silicon, the key raw material for manufacturing solar cells.
According to the financial statement, “Wacker made good progress with constructing its new polysilicon site at Charleston. Numerous buildings are ready or are about to be completed. Amid the excess capacities currently facing polysilicon, however, Wacker decided last fall to slow down the pace of this project. Charleston’s production start-up is now planned for mid-2015. With this decision, the chemical Group is aligning capacity growth with market demand and, at the same time, easing the burden on 2013’s cash flow.”
Wacker announced the delayed timeline for its then $1.8 billion plant by 18 months. Hemlock Semiconductor followed in early January with its own announcement that it would lay off 300 of 400 employees at its Clarksville polysilicon manufacturing plant and 100 more in Michigan. Hemlock had planned to start production of hyperpure polycrystalline silicon at its $1.2 billion facility later this year. According to news reports, the plant will be utilized, but it’s not known whether it will open for business at any time in 2013.
Cleveland/Bradley Chamber of Commerce President/CEO Gary Farlow recently said Wacker has not given any indication it is halting construction, but only slowed from a fast-track construction schedule to a normal pace.
“They’ve still got equipment coming in and are still putting things in place in the plant. The only difference is, they’re now on a more normal schedule. I think that’s an indication of Wacker ’s longer-range view of their market and industry.”
Wacker Polysilicon Human Resources Director Erika Burk also said recently that what happened in Clarksville had nothing to do with Wacker. So far, Wacker has approximately 270 employees, including about 50 German nationals on temporary assignment to Tennessee.
According to the financial report, during the first two months of 2013, the company is currently selling much higher volumes of polysilicon than expected and prices are currently stable at a low level. Demand for semiconductor wafers is still weak, and prices are low.
As expected, polysilicon sales declined in 2012, down almost 22 percent to $1.4 billion. Although the division grew 20 percent to 38,000 metric tons in 2012, year-over-year sales were lower amid significantly reduced hyperpure-polysilicon prices.
According to the report, the decline was due to the difficult market environment, marked by excess capacity, high inventories and ongoing consolidation. To align production output with customer demand, Wacker Polysilicon decided to partially curb production and introduce reduced working hours at some Burghausen facilities.
“In 2013, Wacker’s polysilicon business will remain difficult. The consolidation process in the industry is not yet over, there is still excess capacity, and polysilicon prices are currently low. Additionally, the market faces the burden of anti-dumping investigations by the European Union and the Chinese Ministry of Commerce. If both sides impose punitive tariffs, the global photovoltaic market could suffer.
“According to market researchers, the semiconductor sector will grow, chiefly in the second half of 2013. The year has started off sluggishly, though,” the report stated.