From oversupply to tightness: China’s polysilicon reset

This insight explores the structural rebalancing of China's polysilicon market, which is being driven primarily by government policy intervention rather than natural market forces. After a period of extreme overcapacity and below-cost pricing, China's "anti-involution" measures—including bans on below-cost sales, capacity restrictions, and energy-efficiency standards—have triggered approximately 30% price increases in 2025 and are accelerating industry consolidation. The mandated transition from Siemens to granular FBR technology, combined with faster retirement of older capacity, is creating potential supply tightness risks, particularly if n-type wafer demand remains strong. However, despite this consolidation, Chinese polysilicon will remain at least 50% cheaper than Western alternatives, meaning overseas producers are unlikely to gain significant competitive advantage, though some US-market suppliers may need to adjust sourcing due to expanded UFLPA entity listings.