Daqo New Energy to Discontinue its Wafer Manufacturing Operations

Daqo New Energy (NYSE:DQ) announced that it plans to discontinue its solar wafer manufacturing operations in September 2018.

The company that is engaged in providing high purity polysilicon for global solar PV industry said that the plans to discontinue solar wafer because it wants to focus on its core polysilicon manufacturing business.

As quoted in the press release:

Mr. Longgen Zhang, CEO of Daqo New Energy, commented, “We made a strategic decision to discontinue our solar wafer manufacturing operations to accommodate the increasingly challenging market conditions for multi-crystalline wafers. We expect to complete the shutdown of the solar wafer business in the third quarter of 2018. This move will allow us to focus all of our resources and expertise on our core polysilicon manufacturing business and Phase 3B expansion project which will begin pilot production in the fourth quarter of 2018.”

Founded in 2008, the Company is one of the world’s lowest cost producers of high-purity polysilicon. Daqo’s highly-efficient and technically advanced manufacturing facility in Xinjiang China currently has annual polysilicon production capacity of 18,000 metric tons, and the Company is undergoing capacity expansion to reach annual polysilicon production capacity of 30,000 metric tons by the end of 2018.

The Company expects to incur approximately US$21.6 million in fixed-asset impairment and restructuring charges during the third quarter of 2018, including approximately US$1.6 million in employee severance payments and approximately US$20.0 million in impairment of long-lived assets.

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