Recently, China’s Ministry of Finance and the State Taxation Administration issued the Announcement on Adjusting Export Tax Rebate Policies (hereinafter referred to as the “Announcement”), which reduced the export tax rebate rate for photovoltaic cells and modules. Meanwhile, the Ministry of Industry and Information Technology released the Photovoltaic Manufacturing Industry Specification Conditions (2024 Edition) (hereinafter referred to as the “Specification Conditions”), which raised the entry threshold for newly added PV production capacity.

Within the PV industry, both the reduction in export tax rebates and the higher threshold for new capacity are widely regarded as positive signals. Fundamentally, these measures increase requirements for corporate cost control capabilities and accelerate the phase-out of outdated production capacity.

It is also worth noting that, in reflecting on the industry’s ongoing “involution” (excessive internal competition), some insiders believe the core issue lies in product homogeneity.
“If we can continue to foster the emergence of next-generation leading technologies like granular silicon, only then can we truly curb involution and achieve high-quality development,” an anonymous industry source told Securities Daily.

Has Granular Silicon’s Market Share Reached 20%?

Granular silicon, produced via the silane process, is a photovoltaic raw material increasingly viewed as a potential replacement for traditional modified Siemens rod-shaped silicon. GCL Technology is currently the only pure granular-silicon-focused listed company in the capital market.

In fact, amid the prolonged downturn in the polysilicon market this year and the collective earnings pressure on leading enterprises, the large-scale commercialization of granular silicon has indeed brought notable differentiation to GCL Technology.

Public data show that GCL Technology’s tax-inclusive selling prices of granular silicon in the first three quarters were RMB 55.05/kg, RMB 35.52/kg, and RMB 32.75/kg, respectively. Corresponding cash production costs (including R&D) were RMB 37.84/kg, RMB 35.19/kg, and RMB 33.18/kg. In contrast, since the second half of 2024, polysilicon prices have fallen below the industry’s average cash production cost, which, according to market sources, still generally remains above RMB 40/kg.

More importantly, as polysilicon prices dipped below industry-wide cash costs, many manufacturers reduced operating rates, which in turn created an excellent opportunity for granular silicon to expand its market share. According to GCL Technology’s disclosed production and sales data, although its granular silicon output declined quarter-on-quarter in Q3, shipments rose against the trend to 80,900 tons, significantly higher than 65,200 tons in Q1 and 61,200 tons in Q2. Some industry analysts therefore estimate that granular silicon’s market share reached around 20% in the third quarter.

Policy Guidance Toward High-Quality Development

From a policy perspective, while the “Announcement” aims to accelerate the elimination of outdated capacity by lowering export tax rebates, the “Specification Conditions” focus on raising technical standards, strengthening quality management and intellectual property protection, reinforcing green manufacturing and environmental requirements, and increasing minimum capital ratios. These measures both encourage investment in high-quality capacity and precisely curb redundant construction.

This indicates that in response to the persistent challenge of industry involution, cross-departmental and cross-sector policy coordination has begun to take shape. More importantly, these policies do not merely offer short-term fixes but instead firmly steer the industry toward high-quality development.

As a result, a growing number of industry participants recognize that in the future, homogeneous capacity and products lacking technological advancement, intellectual property advantages, or sustainability credentials will gradually lose value.

This is precisely where GCL Technology’s granular silicon holds a competitive edge. From a sustainability standpoint alone, its lower reaction temperature, higher conversion efficiency, and lower comprehensive power consumption reduce carbon footprint values by over 35% compared with rod-shaped silicon produced via the modified Siemens process — equivalent to cutting more than 2 million tons of CO₂ emissions for every 100,000 tons produced.

It is also noteworthy that in its third-quarter financial report, GCL Technology disclosed its goal of reducing granular silicon cash costs to below RMB 30/kg within the year. Achieving this target would not only help the company emerge from the industry cycle ahead of peers, but also position it as a model for escaping involution through technological innovation.

Link：http://www.zqrb.cn/finance/hangyedongtai/2024-11-26/A1732621224553.html