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DEEP RESEARCH · OCI HOLDINGS/POLYSILICON

[OCI Holdings] Research Note

Solar polysilicon volatility, U.S.-China supply-chain shifts, and the move into semiconductor-grade polysilicon

Published: 2025-07-25 · Corporate structure/materials strategy · Naver Blog

Investment decisions are your responsibility. This material is research and is not a buy or sell recommendation.

0. Bottom line first

My core view is built around polysilicon price recovery, a non-China supply-chain premium, and whether the Tokuyama semiconductor-grade polysilicon JV can reach commercial production in 2029. The broader turn in chemicals also looks favorable.

Source audio: OCI Holdings audio

1. Holding-company structure and portfolio

Official fact: OCI Holdings launched through a spin-off dated May 1, 2023 and relisted on the KOSPI on May 30, 2023. OCI Co. took over the chemical business, and OCI Holdings controls key subsidiaries including a 44.97% stake in OCI Co.

Interpretation: The split separates investment/holding-company functions from traditional chemicals and gives the company more room for long-duration growth investments such as semiconductor-grade polysilicon.

Malaysia

OCI TerraSus

Produces 35,000 tons per year of solar polysilicon. Hydropower access is the cost and ESG moat.

U.S.

OCI Energy/Mission Solar

Builds a U.S. solar value chain through a 5.9 GW development pipeline and 500 MW annual module capacity.

New

OTSM

The semiconductor-grade polysilicon JV is the high-value axis for reducing exposure to solar-price volatility.

2. Solar polysilicon: cost moat and China variable

Official fact: OCI stopped domestic solar-grade polysilicon production in 2020 and consolidated production in Malaysia. Malaysia capacity expanded from 11,000 tons at acquisition to 35,000 tons.

Polysilicon prices fell from about USD 39/kg in 2022 to USD 5.6-6.2/kg around late 2024 and early 2025. OCI Holdings reported a consolidated operating loss of KRW 77.7 billion in the second quarter of 2025.

Solar polysilicon earnings structureA cost moat cannot fully offset a market-price collapse
Low costHydro PPA
Non-ChinaSupply-chain premium
China expansionOversupply
EarningsPrice sensitivity
The Malaysian asset is strong, but cash-flow management matters in a downturn.

3. OTSM: semiconductor-grade transition

Official fact: OCI TerraSus and Tokuyama formed a 50:50 JV called OTSM. Investment is about USD 435 million, or roughly KRW 600 billion, for an 8,000-ton-per-year semiconductor-grade polysilicon plant at OCI TerraSus's Sarawak site. The source gives July 2025 groundbreaking, first-half 2027 completion, and 2029 commercial production.

ItemDetails
OwnershipOCI TerraSus 50%, Tokuyama 50%
ProductSemiconductor-grade polysilicon, 11-Nine target
Capacity8,000 tons per year
Power10-year PPA with Sarawak Energy, hydropower based
Target customersMajor semiconductor companies in Korea, Japan, and Taiwan

Interpretation: OCI contributes the low-cost, green Malaysian site and operating know-how; Tokuyama contributes ultra-high-purity technology and customer relationships. If it works, OCI Holdings partly shifts toward a critical semiconductor-materials supplier.

4. Scenarios and tracking points

Bull Case

  • Polysilicon prices rebound and the Malaysian cost base regains operating leverage.
  • Forced-labor rules and CHIPS Act dynamics increase the premium for non-China materials.
  • OTSM clears customer approval and reaches commercial production in 2029.

Bear Case

  • Chinese oversupply persists and solar-grade polysilicon profitability remains impaired.
  • Customer approval and ramp-up for semiconductor-grade polysilicon are delayed.
  • Losses continue at multiple subsidiaries at the same time.
  • Solar-grade polysilicon prices and Chinese production discipline.
  • OCI TerraSus inventory, cash flow, and utilization recovery.
  • OTSM construction progress, customer approval, and 2029 schedule.

Sources

Naver original