Daqo New Energy completes construction, installation of Shihezi facility
Daqo New Energy announced that it has completed the construction and installation of its Phase 3B polysilicon production facility in Shihezi, Xinjiang and has begun pilot production. The company expects the Phase 3B facility will ramp up to full production capacity and expand its total production capacity to 30,000 MT by the end of Q1 2019. Once Phase 3B has reached full production capacity, a power purchase agreement with the local electric utility will reduce the company's electricity rates by approximately 18% from the current levels, further lowering the company's polysilicon production cost. With lower electricity rates, higher manufacturing efficiency, greater economies of scale, and enhanced equipment and process, the company expects the overall total cost of polysilicon production for its Xinjiang facilities to decrease to approximately $7.50 per kilogram. Separately, the company has launched a debottlenecking project to modernize some of its current chemical vapor deposition, or CVD, furnaces and upgrade other production equipment which will allow it to increase efficiency and production volume. The company expects to complete the debottlenecking project and increase its annual capacity to 35,000 MT by the end of June 2019. The company's Phase 4A capacity expansion project is currently under construction and is expected to begin pilot production in Q4 of 2019. The company expects to ramp up Phase 4A to full production in Q1 of 2020 which will expand its total production capacity to 70,000 MT. When production from Phase 4A is fully ramped up, the company's electricity rates will decrease further based on the agreement with the local electric utility, and the overall total cost of polysilicon production for its Xinjiang facilities is expected to decrease to approximately $6.80 per kilogram.