china's 2025 goal: semiconductor polysilicon dominance

2025-09-08 general

Washington DC, Monday, 8 September 2025.
china is making a major push to lead the world in producing semiconductor-grade polysilicon by 2025. this crucial material is key for manufacturing computer chips. the effort is backed by significant government support. chinese companies are expanding production, which could shake up the global supply chain. this expansion may affect costs and supplies for major players like tsmc, nvidia, and asml. one company, tongwei, has already received over $300 million in government support since 2009. the us department of commerce has launched an investigation into polysilicon imports.

government support and market impact

Beijing is using financial support, infrastructure development, and strategic planning to help chinese firms dominate the polysilicon market [1]. this includes solar-grade polysilicon and expanding the share of semiconductor-grade polysilicon [1]. tongwei, a leading chinese producer, has received approximately $301 million in government grants and tax concessions since 2009 [1]. the chinese government is also planning to create a $7 billion fund to reduce overcapacity by acquiring and shutting down about one-third of polysilicon production [1]. this intervention could stabilize prices and benefit the remaining producers.

competitive advantages and cost dynamics

chinese polysilicon manufacturers benefit from significantly lower energy costs [1]. energy rates in xinjiang are as low as $0.03 per kilowatt-hour (kwh), while central china sees rates around $0.06 per kwh [1]. in comparison, industrial producers in the u.s. and europe pay an average of $0.08/kwh and $0.20/kwh, respectively [1]. this cost advantage allows chinese firms to sell polysilicon at approximately $5/kg, even though the fair market price is estimated at $24/kg [1]. this aggressive pricing strategy, while leading to reported losses of $40 billion for chinese firms in 2024, puts significant pressure on global competitors [1].

trade investigations and potential restrictions

the u.s. department of commerce initiated a section 232 investigation into polysilicon and derivative products on july 1, 2025 [1]. this investigation could lead to the president prohibiting imports of chinese-origin or chinese-linked polysilicon [1]. alex rubin, a visiting fellow at the hoover institution’s tech policy accelerator, suggests that the department of homeland security should develop traceability standards [1]. departments of commerce, defense, and treasury are also considering leveraging existing financial support, including the chips act, to bolster domestic production [1].

xuzhou’s role in china’s semiconductor industry

xuzhou is emerging as a key region for semiconductor materials and equipment in china [2]. several xuzhou-based companies, including xinhua semiconductor and zhonghuan leading, showcased their products at the semicon china 2025 international semiconductor exhibition [2]. xinhua electronic-grade polysilicon and zhonghuan large silicon wafers are leading products in their respective fields within china [2]. xuzhou aims to become a nationally influential base for semiconductor materials and equipment manufacturing [2].

domestic advancements and global competition

tianrui silicon materials, a chinese company, has successfully developed high-resistance zone-melted polysilicon [7]. this achievement makes them the third company globally, and the first in china, capable of mass-producing this product [7]. their polysilicon products have passed tests at the university of missouri atomic energy laboratory and the national nonferrous metals and electronic materials analysis and testing center [7]. this reduces reliance on imports and supports the strategic goals of china’s semiconductor industry [7].

market dynamics and price trends

on september 8, 2025, the average spot price for polysilicon in china was 46,400 yuan/tonne [8]. despite rising polysilicon quotations, market transactions remain cautious due to weak downstream procurement willingness and a wait-and-see attitude [8]. p-type silicon material is expected to remain around 42,000 yuan/tonne, while n-type material is projected to be between 47,000 and 55,000 yuan/tonne [8]. these price fluctuations and market sentiments reflect the ongoing adjustments in the polysilicon market as china strives for dominance.

Bronnen

semiconductor supply chain polysilicon