NEWS

With REC Silicon ceasing polysilicon production at its Moses Lake factory, it has no operational polysilicon manufacturing capacity in the US. (Illustrative Photo; Photo Credit: Bjoern Wylezich/Shutterstock.com)

Anu Bhambhani

Published on: 

Jan 03, 2025, 4:40 pm

Key Takeaways

• REC Silicon is ceasing production of polysilicon at its recently restarted Moses Lake factory in the US  

• Polysilicon produced here failed qualification tests carried out by the customer 

• It will instead use the equipment on site to produce silicon gases with a focus on achieving profitability  

Norwegian advanced silicon materials producer REC Silicon has decided to cease polysilicon production at its Moses Lake, Washington located facility in the US. It will instead use the equipment to produce silicon gases where it claims ‘clear strength, market positioning, and product differentiation’.  

“Given the high fixed costs involved in operating the facility and uncertainty related to the timing and quantifiable success of further improvements in its product handling process, as well as the available customer base, a shutdown of the Moses Lake facility is the best way to maintain strategic optionality and financial flexibility,” stated the management.   

It will continue to supply silicon gases for the production of electronic grade and solar grade polysilicon, among other industrial uses including for lithium-ion battery production. The company says it will prioritize cost reduction to return to profitability.  

REC had earlier shuttered the Moses Lake factory in 2019. It restarted production in Q4 2023. It was scheduled to restart production in Q4 2024 thanks to South Korea’s Hanwha Group’s Hanwha Solutions acquiring a majority stake in the company. The duo also entered into a 10-year take-or-pay offtake agreement for 100% FBR polysilicon output from Moses Lake as Hanhwa planned to use the same for its vertically integrated US production (see REC Silicon Secures 100% Offtake Agreement With Hanwha).   

However, REC produced polysilicon failed the qualification test that its ‘customer’ conducted through a 3rd party testing partner due to impurities related to the post-reactor product finishing and handling systems.    

“After further discussion with its customer, the customer is not able to wait any longer for delivery of product that consistently meets the requirements at the correct levels and can be delivered at the needed volumes. There are currently no other customers in the USA and limited customers outside of China, all of which are not options at this time due to product quality, market and contract conditions and timing of potential need,” it added.  

Meanwhile, REC is now seeking additional financing options to fund this transition which will also entail lay offs. It is currently in advanced discussions with its largest shareholder for a short-term loan.  

With this decision, REC Silicon will exit polysilicon production in the US for good since it has already shut down polysilicon manufacturing at its Butte, Montana facility, also in the US (see REC Silicon Shutting Down Butte Manufacturing Fab).   

This also stresses the continued lack of locally produced polysilicon in the US which is a significant piece of the puzzle for the country to have a domestic vertically integrated solar supply chain.