U.S. Solar Tariffs Lift Hanwha, OCI Outlook

An exterior view of the Hanwha Solutions Cartersville plant in Georgia, United States. (Photo provided by Hanwha Solutions) As the U.S. has decided to impose high tariffs of up to 268% on solar products from India, Indonesia, and Laos, the non-Chinese supply chain competitiveness of Hanwha Solutions and OCI Holdings is drawing attention. Analysis indicates that the importance of local U.S. production facilities and the ability to procure non-Chinese raw materials is growing, coupled with the implementation of the U.S. minimum import price system for solar products and China’s push for export controls on core manufacturing technologies. According to foreign media and the industry on Oct. 21, the United States International Trade Commission (USITC) recently ruled that the U.S. industry suffered damages due to imports of solar cells and modules from India, Indonesia, and Laos. Previously, the anti-dumping and countervailing duty rates calculated by the U.S. Department of Commerce reached 147.06% to 268.06% by company. The U.S. is also scheduled to implement the minimum import price (MIP) system for solar products under the Trade Expansion Act starting this December. The standards are $21 per kilogram for polysilicon, $0.22 per watt (W) for cells, and $0.38 per W for modules. An additional tariff of 15% will also be applied to some solar-related imports. This is a measure to induce domestic production within the U.S. China has also released an amendment to add 12 solar technology items, including perovskite-silicon tandem cells and polysilicon manufacturing technologies, to its export ban and restriction list. Although it is currently in the opinion-gathering stage, if the regulations are confirmed, it could affect the establishment of manufacturing facilities and the securing of technology by overseas companies that rely on Chinese technology. In accordance with such regulatory changes, the possibility is raised that the business conditions of domestic solar companies that have secured U.S. production facilities and non-Chinese raw material supply chains will improve. Hanwha Solutions is establishing a local supply chain centered on its solar production facilities in Georgia, U.S. Its module production capacity in the U.S. is estimated at 8.6GW annually, while ingots, wafers, and cells are estimated at 3.3GW each. Analysis suggests that if the price negotiation power of U.S.-made products increases, it could help improve the profitability of local production facilities. However, assessments suggest that whether the manufacturing sector’s performance will improve remains to be seen. Samsung Securities forecasted Hanwha Solutions’ operating profit for the third quarter of this year at 228 billion won (about $172.05 million), while expecting an operating loss of 127.3 billion won in the solar module manufacturing sector. It is pointed out that the key will be how much the tax credit benefits resulting from the rise in the operation rate and the increase in production volume of U.S. production facilities will reduce the cost burden of the manufacturing sector. Hanwha Qcells has equipped its Jincheon plant in North Chungcheong Province, South Korea, with an annual production capacity of 5.3GW for cells and 2.8GW for modules. It aims to begin mass production of next-generation perovskite-silicon tandem cells and modules at the end of 2028. OCI Holdings is expanding its non-Chinese supply chain through polysilicon production facilities in Malaysia and wafer production facilities in Vietnam. A representative example is its confirmation in July of an expansion plan to increase the polysilicon production capacity of its Malaysian subsidiary, OCI Terrasus, from the existing 35,000 tons to 70,000 tons per year. OCI Holdings has also signed a long-term supply contract with a U.S. big tech company. Analysis indicates that as U.S. import regulations are strengthened, the demand for supply chains with low reliance on Chinese raw materials could increase. An industry official forecasted, “The impact of U.S. protectionist trade measures on corporate performance will vary depending on future production volume and sales prices,” adding, “If the prices of imported solar products rise, the price competitiveness of local manufacturers could improve, but the facility investment costs of power generation business operators and some raw material procurement costs could also increase together.”