Middle East and Southeast Asia Wafer Producers Expand Capacity Amid Historic Price Lows

This week saw significant declines in FOB China wafer prices across all major categories. Mono PERC M10 and G12 wafers fell to $0.135/pc and $0.202/pc, marking week-on-week decreases of 4.93% and 1.94%, respectively. N-type M10 and G12 wafers followed suit, dropping to $0.131/pc and $0.170/pc—a 4.38% and 6.59% decline from the prior week.

The sharp price downturn stems primarily from weakening downstream demand after a recent peak. Market sources indicate solar cell and module producers plan to reduce operational rates starting in May, with wafer manufacturers expected to follow suit. Specialized wafer producers are maintaining relatively higher utilization rates, with one leading firm operating at approximately 80% capacity. In contrast, integrated manufacturers have scaled back to 55% utilization, while smaller second- and third-tier players—hampered by limited capacity and outdated equipment—are running at just 20–30%.

Despite manageable current inventory levels, soft demand coupled with persistent overcapacity has heightened risks of stockpiling. To stimulate sales, some manufacturers are cutting prices and sacrificing profit margins. Mainstream N-type M10 and 182183 mm wafers in China now trade around CNY 1 ($0.14)/pc, with certain 182183 mm products already below this threshold. Cell producers are reportedly enforcing a CNY 1/pc procurement ceiling, intensifying margin pressures.

Profitability concerns are mounting. Under ideal conditions—full capacity and N-type polysilicon priced below CNY 30/kg—cash production costs for N-type M10 wafers could stabilize at CNY 1/pc. However, with polysilicon prices lingering at CNY 30–40/kg and suboptimal line utilization, sector-wide losses are becoming evident. Widespread pessimism about 2025 demand has deepened bearish sentiment on Chinese wafer makers’ earnings, though the industry’s large scale and operational flexibility mean meaningful capacity reductions will likely unfold gradually. Cash flow management will be critical for long-term survival.

Globally, trends outside China are mixed. A Southeast Asian producer with 6 GW capacity plans to raise utilization from below 50% to over 70% in May, driven by Indonesia’s cell manufacturing expansion. Another similarly sized regional player remains at 30% utilization. In the Middle East, a company with announced large-scale wafer plans aims to break ground as early as Q1/Q2 2026, though project feasibility assessments may delay timelines further.

As price competition intensifies, the divergence in capacity strategies—between aggressive expansion in Southeast Asia/Middle East and cautious retrenchment in China—highlights the sector’s fragmented response to historic market headwinds.