REC Silicon announced that it is ceasing production at its Moses Lake, Washington, facility. The company shut down its polysilicon production facility in Montana earlier this year as well. REC Silicon now has no operating polysilicon efforts within the United States.
The company said that while production of polysilicon will be discontinued in Moses Lake, the equipment involved in production of silicon gases will be maintained in a “safe and recoverable mode that incurs minimal interim costs, allowing the unit to restart with reasonable notice.” This would allow REC Silicon to capitalize on future customer demand for silicon anode or other gases within the energy storage space.
The company stated it will now focus its business efforts on silicon gases.
The once-globally dominating polysilicon company was on track to be the first step in Hanwha Solutions’ quest to produce solar panels with a 100% American supply chain — REC Silicon polysilicon would be sent to Hanwha’s Qcells factories in Georgia to be made into ingots, wafers, cells and then panels. Hanwha became the largest shareholder in REC Silicon in 2022 and planned to buy all of the polysilicon product made in Moses Lake for 10 years. Hanwha’s investment in REC Silicon allowed the company to restart its Moses Lake operations after pressure from the Chinese market forced REC Silicon to close the site in 2018.
REC Silicon announced to shareholders that it began limited polysilicon production at Moses Lake in late 2023. The company had been working on improving the levels of impurities that “resulted primarily from the post-reactor product finishing and handling systems.” This included changing materials, procedures and operating conditions. REC Silicon worked with third-parties to evaluate the situation but ultimately was unsuccessful in attempts to rectify the issues.
The company received an “unsuccessful qualification test” earlier this month by its customer (assumed to be Hanwha). This was due to “lower-than-expected levels of crystallization and the ingot yield observed in the testing runs, which the customer deemed not to be acceptable for their production process at this stage.”
REC Silicon said its customer is unable to wait any longer for delivery of product that meets requirements, although production efforts at the Qcells ingot and wafer facility in Georgia has not yet started itself. REC Silicon said that with no other customers in the United States and limited customers outside of China, the best option is to cease production entirely.
REC Silicon said it is now in discussions with its customer regarding the cancellation of its contract, including the “elimination of any penalties and a deferral of the repayment of the initial pre-payment.”
The shutdown at Moses Lake will start immediately and could take three months. The workforce there will be reduced accordingly.
