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China SiC Industry is On the Up and Up

Yicheng has invested in the photovoltaic-based silicon carbide (SiC) powder Phase II and is now the world’s largest manufacturer of silicon carbide fine powder for the photovoltaic industry

Reportlinker has published a summary of the ‘China Silicon Carbide Industry Report, 2009-2010.’

China is the leading producer and consumer of silicon carbide, and its output in 2009 reached 535 kilotons or so, occupying 56.3% of the global total and ranking the first worldwide.

The Chinese SiC industry characterizes large output but lack of competitiveness. Despite the sufficient supply of output, most of China-made SiC products are low-end and preliminarily processed. However, certain demand-supply gaps exist in the refined and deep-processed products, which bring in greater revenue.

The surge in demand for products requiring sophisticated manufacturing processes like those used in the production of silicon carbide crystals is however far too great for China to cope with, even internally. In fact, in 2009 alone, China imported 1.3 kilotons of silicon carbide to make up for the domestic market deficiency.

In spite of some opportunities brought by the upgrading of product structure and the extension of downstream demand, the development of the silicon carbide industry, which is featured by high energy consumption and pollution, is exposed to hindrances from the influence of energy shortages and national energy conservation policies.

In particular, the examination and approval of new projects is restricted, and relevant preferential policies such as low electricity prices have already been discontinued. Consequently, the future development of China’s silicon carbide industry faces many uncertainties.

The report focuses on the following factors in the Chinese SiC insustry: operation environment, current development, supply & demand, competition pattern, import & export, price trend, and development outlook. It also highlights current development and prospect of silicon carbide in the downstream industry, as well as the operation and development advantage of key Chinese enterprises.

For example, Yicheng New Material (the original Yicheng Silicon Carbide) has expanded despite the global financial meltdown. After purchasing two silicon carbide material enterprises, one of which is in Qinghai, the firm invested in the photovoltaic-based silicon carbide powder Phase II project and put it into operation at the end of November 2009.

As a result, its annual output capacity has been increased to 600 million tons, and the company has become the world’s largest manufacturer of silicon carbide fine powder for the photovoltaic industry.

Through the business strategy of ‘Transfer of Profits but No Transfer of Market’, the company has been expanding its customer base. In 2009, the sales revenue of the company was RMB 2.8 billion, up 75% year-on-year (YoY). Along with the recovery of silicon carbide market, the company made remarkable achievements in the first quarter of 2010 with the sales revenue hitting RMB 960 million, a 140% YoY rise.

With regard to development advantage, Yicheng New Material is currently the biggest manufacturer of photovoltaic silicon carbide in China. It enjoys a high market share with its output capacity taking a very respectable 11.2% share of the entire silicon carbide market.

Additionally, as the company is located in the anthracite-abundant Henan Province, the sufficient and stable source of raw materials not only greatly lowers the production costs, but also effectively guarantees the steady quality of its silicon carbide products.
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