Chinese polysilicon maker Daqo New Energy Corp (NYSE:DQ) will end solar wafer manufacturing this month in response to "the increasingly challenging market conditions for multi-crystalline wafers."
The company said today the decision to discontinue the business will lead to USD 21.6 million (EUR 18.7m) in charges in the third quarter of 2018, comprised of USD 20 million in impairment of long-lived assets and USD 1.6 million in employee severance payments.
The move will allow Daqo to focus on its core polysilicon manufacturing business and the Phase 3B expansion project, which will start pilot production in the fourth quarter of 2018, said chief executive Longgen Zhang. The so-called Phase 3B expansion plan involves raising annual nameplate polysilicon capacity from 18,000 tonnes to 30,000 tonnes by end-2019.
In August, Daqo New Energy reported an improvement in second-quarter attributable net profit to USD 13.4 million, but a fall in revenues due to the uncertainty on the domestic solar market and its effect on downstream demand. Still, the company expressed confidence in the long-term growth of the polysilicon industry and confirmed its full-year polysilicon production forecast.
April-June revenues from wafer sales were down to USD 4 million from USD 7.6 million in January-March and from USD 14.9 million in the second quarter of 2017.
(USD 1 = EUR 0.864)
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