Two Chinese companies are setting up facilities for manufacturing silicon wafers, a key component in the production of solar cells, with a cumulative capacity of 40 GW.

The Sichuan Development and Reform Commission recently gave the projects the green light. Sichuan-based Tongwei Co has secured approval for a 20 GW plant in Chengdu. The plant, expected to be completed by September 2025, involves an investment of CNY700 million (~$96 million).

The plant will involve installing advanced equipment such as slotting machines, automatic sticking lines, and integrated cleaning machines.

The second project is being developed by Suzhou Shijing Environmental Technology Co at a cost of CNY4 billion (~$544 million). Jinko Solar owns a 10% stake in the company. The manufacturing facility will have an annual wafer capacity of 20 GW and a solar cell capacity of 20 GW.

According to a Wood Mackenzie report, China holds a near-monopoly in the solar supply chain, with over 80% of the world’s polysilicon, wafer, cell, and module manufacturing capacity until 2026.

In March 2024, a group of U.S. senators wanted the government to ensure that domestic production of wafers and polysilicon used in the manufacturing of solar modules is appropriately incentivized. “In order to cultivate a strong domestic manufacturing industry, disrupt China’s dominance of the solar supply chain, and bolster U.S. energy and national security, it is essential that these critical solar energy components be manufactured in the United States,” they said.

In December 2024, the U.S. announced final modifications to Section 301 tariffs, increasing duties on specific Chinese imports, including a 50% rate on solar wafers, effective January 1, 2025.

According to the National Energy Administration, China added 160.88 GW of solar energy capacity, a 19.85% increase in the first nine months of 2024 from 128.94 GW in the same period in 2023.