Silicon Prices for 'Semiconductor and Solar Panel Materials' Surge 300% in Two Months

Overwhelming Production No.1 China’s Output Cuts Impact... Price Strength Expected to Continue Until Next Summer

Silicon Price Trends [Image Source= Bloomberg]

[Asia Economy Reporter Park Byung-hee] The price of silicon, widely used in semiconductors, solar panels, and automotive materials, has surged sharply, increasing the risk of inflation. This is because China, the overwhelming world’s No. 1 silicon producer, is reducing production due to power shortages.

Bloomberg reported on the 1st (local time) that the price of metallurgical silicon has surged 300% in less than two months due to China’s production cuts.

Silicon accounts for 28% by mass of the Earth's crust, second only to oxygen (46%). It is widely used in computer semiconductors, concrete, glass, automotive parts, and more. Recently, demand has increased as a key material for converting sunlight into electricity in solar panels. Bloomberg explained that the rise in silicon prices is a factor driving price increases in various products such as semiconductors and automobiles.

Since 2000, silicon prices have ranged between 8,000 and 17,000 yuan per ton. However, recently, silicon prices soared to a peak of 67,300 yuan per ton.

Silicon producers in Yunnan Province, China, have been ordered to reduce silicon production by up to 90% compared to August from last month through December. Yunnan is the second-largest silicon production area in China, accounting for more than 20% of China’s silicon output. Sichuan Province, the third-largest producer with 13%, is also suffering from power shortages. The fortunate point is that Xinjiang Autonomous Region, China’s largest silicon production area, has not yet experienced severe power shortages.

The rise in silicon prices is already causing ripple effects in related industries. The price of polysilicon, a key material for solar panels, surged 13% on the 29th of last month to $33.62 per kilogram, marking the highest level since 2011. Polysilicon prices have risen more than 400% since June last year.

Yang Xiaoting, a senior analyst at Shanghai Metal Market, predicted that silicon prices will maintain their current high levels until next summer. He added that because silicon has many uses, even without power shortages, industrial silicon will inevitably suffer from supply shortages.

This content was produced with the assistance of AI translation services.