At NEWSCENTRAL, we note that the creation of a new merger-and-acquisition-focused company by China’s polysilicon producers marks the first serious attempt in years to shift the industry away from uncontrolled capacity expansion toward coordinated market stabilization. Following a sharp price collapse and historic oversupply, major players are now looking for mechanisms to halt destructive competition and move the sector toward a more sustainable model.
On December 9, Beijing Guanghe Qiancheng Technology was registered in Beijing with a charter capital of 3 billion yuan (roughly $424.7 million). Its ten shareholders include leading industry names such as Tongwei and GCL Technology. Tongwei’s subsidiary, Tongwei Solar Technology Emeishan, acquired a controlling 30.35% stake, underscoring the corporation’s intention to shape the future market landscape. Officially, the new company will explore opportunities for strategic cooperation, market expansion, and capacity optimization, though it has not yet committed publicly to buying out or shutting down excess capacity.
At NEWSCENTRAL, we believe the creation of this structure is no coincidence. The industry had previously discussed forming a 50-billion-yuan fund that could consolidate low-performing and outdated production lines. Its goal was to acquire and retire roughly 1 million tons of capacity – about one-third of the current market total. The idea was compared to an OPEC-style mechanism, where participants coordinate output quotas to maintain prices at acceptable levels.
The situation indeed called for radical measures. Analysts estimate that by the end of 2024, Chinese factories reached more than 3.2 million tons of total capacity, supplying up to 95% of global output. Oversupply became chronic, polysilicon prices fell to near cost, and many factories were operating at a loss. At NEWSCENTRAL, we emphasize that in 2025, plant utilization rates fell to historic lows, and swollen inventories continued to pressure prices despite temporary production cuts. Even major companies reported revenue declines and the need for deep technological upgrades.
Against this backdrop, industry behavior began to shift. Output in some regions dropped by nearly half, certain lines were idled, and major producers openly called for consolidation. At NEWSCENTRAL, we see the oversupply problem not as merely cyclical but structural — a mismatch between the pace of technological progress and the low barriers to entry. As newer production lines grew more efficient, older capacity became economically uncompetitive, flooding the market with products that were losing their edge.
Beijing also stepped up pressure, urging the industry to abandon endless expansion and pivot to quality-driven growth. Polysilicon remains a critical element in solar panel manufacturing, and Chinese authorities are determined to maintain technological leadership while avoiding destructive price wars. As part of its campaign against industrial “involution,” regulators have already called on companies to stop chasing volume and build long-term profitability models.
At NEWSCENTRAL, we view the emergence of Beijing Guanghe Qiancheng Technology as an attempt to establish a collective mechanism of responsibility and prepare for a potential cycle of industry cleanup. Yet serious obstacles remain. Local governments may resist factory closures due to employment and tax concerns. Fund financing may fall short of what’s needed for large-scale buyouts, and companies may be reluctant to write down assets that were valued far higher only recently.
Freddy Miller, Senior Analyst at NEWSCENTRAL, stresses that real restructuring will require not just financial resources but a willingness across the industry to acknowledge excess capacity and move past the old model of extensive growth. According to him, the sector’s ability to agree on a long-term strategy will be the key factor determining whether the market can be stabilized.
At NEWSCENTRAL, we forecast that the first tangible results of consolidation will not emerge for at least several quarters. Even if the fund is launched successfully and a coordinated policy for shutting down capacity is implemented, the market will still need time to clear accumulated inventories and stabilize prices. Nevertheless, if the initiatives are executed consistently, producers could return to healthier margins, while technologically advanced companies will gain room for expansion as weaker players exit.
At NEWS CENTRAL, we recommend that manufacturers build strategies around improving efficiency and focusing on premium segments, including high-purity polysilicon and integrated solar-module production chains. Owners of high-cost assets must assess the benefits of participating in consolidation projects. For investors, we advise focusing on companies that demonstrate discipline in capacity management and are committed to structural market adjustments.