Xinjiang Daqo New Energy Co, Ltd, a titan in China’s silicon materials sector, has provided key insights into the current and future state of the silicon materials market.

Since the beginning of 2025, the company has observed that the majority of Chinese silicon material producers have been operating at reduced capacity. This has led to the expectation that the supply of silicon material will continue to decline. An interesting market dynamic has emerged this month, with supply and demand more or less in balance in both the silicon material and wafer markets.

In particular, there are early signs of destocking in the industry. This has alleviated some of the overall inventory burden, suggesting a potential shift in market forces. On the policy front, the market-based reform of new energy prices on the grid will have a significant impact. The ongoing policy window period could well trigger a mid-year “installation rush” among end users. This surge in demand is expected to lead to a short – term increase in the demand for silicon material.

All of these elements have combined to provide upward pressure on silicon material prices. However, it’s important to note that existing production capacity in China and current inventory levels are acting as a brake on how high these prices can rise. Taking all factors into account, Daqo New Energy believes that there is still some potential for silicon material prices to rise in the coming period.