GreenergyDaily

Feb. 25, 2026

Chinese polysilicon giant Tongwei Co. plans to buy a smaller domestic rival, as the industry bids to shrink chronic oversupply of the solar-panel material.

Tongwei said it intends to use cash and shares to acquire privately held Qinghai Lihao Qingneng Co., according to an exchange filing on Tuesday that didn't disclose the size of the transaction. The buyer's shares have now been suspended for up to 10 days.

The proposed purchase is the latest step toward rationalizing an industry in the throes of a prolonged downturn. Most polysilicon producers are deeply in the red after an investment binge created far too much capacity relative to demand. Tongwei said in January its net loss in 2025 is likely to worsen to between 9 billion and 10 billion yuan ($1.5 billion), from just over 7 billion yuan a year earlier.

At the same time, the acquisition of Lihao could feed concerns that consolidation threatens to build a monopoly in the sector, an outcome that regulators have warned against.

Leading producers have responded to the slump by forming a joint venture to buy up smaller rivals. With over 30%, Tongwei is the biggest stakeholder in a takeover vehicle — Beijing Guanghe Qiancheng Technology Co. — that controls around three-quarters of China's solar-grade polysilicon capacity. Lihao is a smaller partner in the venture with about 5%.

Well over half of China's current polysilicon capacity needs to be shuttered to rebalance supply and demand, according to BloombergNEF.

"At least 65% of the capacity to be closed will be from the stakeholders of Guanghe Qiancheng, rather than through buyouts of other firms," BNEF analysts including Yali Jiang said in a note.