Polysilicon Supply From Japan for Solar Electronics Disrupted by Quake

M.Setek Co., which has the capacity to make more than a third of Japan’s polysilicon that’s used in solar cells and electronics, said its production was halted by the March 11 earthquake.

Polysilicon output from the facility in Soma City, northeastern Japan, was suspended after the temblor knocked out power in the region, Rei Kikuchi, a company official for the unit of Taiwan’s AU Optronics, said today. The plant has an annual capacity of 7,000 tons out of Japan’s 20,000 tons.

The country produces about 10 percent of the world’s polysilicon, which is used to fabricate solar panels and semiconductors, according to Bloomberg New Energy Finance. Solar cell and module plants in western Japan were unscathed.

“A short-term disruption of this size should not have much effect in the market as there is enough polysilicon out there,” Daniel Guttmann, director of renewable at the consulting firm PwC, said by phone. “It could lead to an upward tick in polysilicon prices, which have risen in the past few months after falling about 90 percent since 2008.”

Shares of non-Japanese polysilicon makers such as Wacker Chemie AG (WCH) and MEMC Electric Materials Inc. have gained since the quake following reports of damage to Japanese manufacturers and rolling power outages. M.Setek didn’t disclose how much of polysilicon it was producing before the quake.

Solar Plants

Production at other manufacturers of polysilicon, cells and modules remains unaffected, according to New Energy Finance.

“In the near-term, there’s concern that problems in electricity supply can lead to a lack of components for manufacturers in industries such as solar and electric vehicles,” said Ali Izadi-Najafabadi, an analyst at New Energy Finance in Tokyo.

Photovoltaic cells are the leading clean energy industry in Japan, which supplies solar products worldwide and aims to build 28 gigawatts in Japanese plants by 2020. The country makes about 2.7 gigawatts in solar modules and cells, about 10 percent of global supply, according to New Energy Finance.

“Japan has big ambitions in solar as the ambitious 2020 target shows,” Guttmann said. “Given Japan’s budget deficit and the cost of rebuilding, the best-case scenario is that this target is not reduced.”

To contact the reporters on this story: Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net; Marc Roca in London at mroca6@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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