Taiwan Polysilicon Corp.(TPSi), a Taiwan-based polysilicon manufacturer invested by LCY Chemical Corp. (LCY), has declared bankruptcy on May 13. Its bankruptcy leads to a temporary void of Taiwan’s local solar-grade polysilicon production.

Wu Xian-jin (吳銜晉), the general manager of TPSi, announced the bankruptcy on a press conference held on May 13. According to TPSi’s financial results for 2014, its total asset was NT$2.28 billion, while the liability was as high as NT$14.308 billion. The negative equity value for its shareholder was NT$12 billion. TSPi is unaffordable to pay off the debt so its boards of directors approved the bankruptcy declaration. Meanwhile, the high liability ratio also impacted LCY’s financial performance in 2014, causing a NT$8.327 net loss after tax and a net loss after tax per share of NTD$9.76.

According to Wu, TPSi had applied for restructuring on April 7, but the application was turned down. TPSi appealed against the ruling on April 15. As the board of directors decided to declare bankruptcy, TPSi will officially file for bankruptcy after withdrawing the former appeal. At the moment, all TPSi’s assets have been mortgaged to its mortgagees; the company will reduce its 123 employees down to 20 ones for necessary production line management and facility guard.

Powertec Energy Corporation is the other Taiwanese solar-grade polysilicon maker, but it will not start producing in the near future because it is not profitable to do. The spot price of polysilicon has been dropping for more than three months due to extremely surplus supply, which is resulted from continuous capacity expansion. It is not profitable for Powertec to produce polysilicon in Taiwan under such situation even it has already completed its production line. Consequently, the bankruptcy of TPSi marks the absence of the upstream segment of Taiwanese PV supply chain.

In this year, many Chinese polysilicon manufacturers expand their production capacity. Utilization rates and capacities of global polysilicon makers like OCI and Tokuyama are also raised. The excessive supply causes the unbalance of supply and demand, and has led to an approximate 20% price decline. The price trend of polysilicon in the second half of 2015 will depend on the actual effect of the suspension of China’s Processing Trade Handbook. EnergyTrend projects divergent polysilicon price trends respectively in China and other markets.

(Photo Credit: TPSi)