Southeast Asia Poised to Benefit from Tokuyama Polysilicon Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Tokuyama Corporation (TYO:4043) (Tokyo, Japan), a relatively new face in the polysilicon market, will begin construction of the company's second Malaysian manufacturing base next spring.

The facility will be located in the Samlaju Industrial Park, about 50 kilometers northeast of Bintulu, and will be operated by Tokuyama's Malaysian subsidiary, Tokuyama Malaysia Sdn Bhd. The plant is scheduled for completion in early 2013. From its factories in Japan and Malaysia, Tokuyama currently produces about 5,200 tons per year of polycrystalline silicon, which is used in the production of solar cells and silicon wafers.

A small portion of the polycrystalline silicon rods produced through the Siemens method are monocrystalline and used in silicon wafers for electronics. The majority of Tokuyama's 99.99%-pure polycrystalline silicon is used in solar cells. To increase quality and advance its own polysilicon technologies, Tokuyama will begin enhancing manufacturing with a vapor-to-liquid deposition (VLD) process. The process was introduced at the Higashi plant and the original Malaysia plant. It will continue to be refined as Tokuyama makes its final decision on whether or not to commercialize the technology for mass production. If VLD is incorporated into normal production methods, the second Malaysia manufacturing base will also benefit from improved quality and enhanced production techniques.

Tokuyama will celebrate its centennial in 2018, at which point Tokuyama is hoping to see $500 million in net sales annually. Although Tokuyama is mainly known for chemicals and medical-related manufacturing, polysilicon is the primary product for which the company hopes to obtain this goal. Tokuyama plans to maintain a steady presence in the global polysilicon market. The company currently has a 10% share and intends to raise its ratio of overseas operating income to overseas sales to 30% or more. The company is investing $710 million into the new base, which will be constructed in association with Chiyoda Corporation (TYO:6366) (Tokyo, Japan), and will include ample facilities for future expansion. When complete, Tokuyama will have a production capacity of 14,200 tons of polysilicon per year.

In the long-term, the polysilicon industry is expected to enter a period of steady growth due to the solar boom, and isolated areas in Southeast Asia stand to benefit the most. Laying transmission lines to isolated areas is not technically or economically viable. However providing electricity to rural areas through independent photovoltaic systems is feasible and cost-effective.

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