Snapshot

Silicon metal is produced by smelting quartz with carbon in electric arc furnaces. It feeds three end markets: aluminum alloys (~43% of volume), silicones (~10%), and polysilicon for solar cells and semiconductor wafers (~25–30% and growing). Polysilicon is silicon metal purified to 99.9999%+ purity — solar-grade for photovoltaic cells, semiconductor-grade (even higher purity) for chip wafers. Global silicon metal production is roughly 3.5 million tonnes per year, with China producing ~70%. Global polysilicon capacity exceeds 3.7 million tonnes (overwhelmingly Chinese), against demand of ~1.9 million tonnes, creating a surplus that has driven prices from ~$33/kg in early 2023 to under $5/kg by mid-2025. Three US-listed companies offer exposure: REC Silicon (silicon gases, Oslo-listed with US OTC), Ferroglobe/GSM (silicon metal, NASDAQ), and First Solar/FSLR (CdTe thin-film solar — a silicon-free competitor, not a silicon producer).

The product & how money is made

Silicon metal (metallurgical grade)

Quartz rock is heated with carbon reductants (coal, charcoal, wood chips) in submerged-arc electric furnaces at ~2,000°C. The output is metallurgical-grade silicon (98–99% pure). Each tonne of silicon metal requires roughly 12 megawatt-hours of electricity — energy is the dominant cost. Producers sell into three channels:

• Aluminum alloys (~43% of volume): Silicon is added to molten aluminum to improve castability and strength. Automotive lightweighting and EV adoption drive this segment.
• Silicones (~10%): Silicon metal reacts with methyl chloride to produce silicone intermediates used in construction, healthcare, electronics, and personal care.
• Polysilicon feedstock (~25–30% and growing): Silicon metal is further purified through the Siemens process or fluidized bed reactor (FBR) process into polysilicon.

Mordor Intelligence, "Silicon Metal Market" (2026); USGS Mineral Commodity Summaries, Silicon (2024).

Polysilicon (solar-grade and semiconductor-grade)

Solar-grade polysilicon (99.9999% pure, "six nines") is melted and drawn into ingots, then sliced into wafers for photovoltaic cells. Semiconductor-grade (99.999999999%, "eleven nines") is the substrate for logic and memory chips. Solar-grade accounts for ~95% of polysilicon volume; semiconductor-grade is ~5% of volume but commands prices 3–5x higher. Revenue comes from selling polysilicon chunks or granules to wafer manufacturers.

EnergyTrend (Oct 2024); Fortune Business Insights, "Polysilicon Market" (2025).

Silicon gases (silane, dichlorosilane)

High-purity silicon gases are used in semiconductor manufacturing (chemical vapor deposition for thin films) and as feedstock for silicon anode battery materials. REC Silicon's remaining business is silicon gas production at its Butte, Montana facility, producing ~540 metric tonnes per quarter at ~$20M/quarter revenue.

REC Silicon Q4 2025 Report (Feb 2026).

Demand

Silicon metal demand

Mordor Intelligence (2026); Fortune Business Insights (2025). Segment volumes derived from percentage shares applied to total market.

Polysilicon demand — contracted vs. forecast

• Contracted Ferroglobe signed a 3-year supply agreement with LONGi for high-purity quartz and silicon metal for solar wafer manufacturing. Terms not disclosed publicly.
• Contracted REC Silicon had a 10-year FBR polysilicon supply deal with Hanwha Qcells Georgia, but entered "advanced discussions about cancelling the contract" after failing quality specifications. This contract is effectively dead.
• Contracted First Solar has a 47.9 GW contracted backlog at $14.4 billion aggregate value, with deliveries through 2030. This is cadmium telluride (CdTe) panels, not silicon.
• Forecast: Global solar PV installations reached ~550 GW in 2025 est., requiring ~1.9 million tonnes of polysilicon est.. The polysilicon market is projected to grow at 14.5% CAGR through 2034. Semiconductor-grade polysilicon demand grows with AI chip production but is a small fraction of total volume.

pv-magazine-usa.com (Jan 2025); EnergyTrend (Oct 2024); Fortune Business Insights, "Polysilicon Market" (2025); First Solar Q1 2026 earnings (Apr 2026).

Supply

Silicon metal capacity

Mordor Intelligence (2026); USGS (2024).

Polysilicon capacity

• China: >3.7 million tonnes of nameplate capacity (2024), producing 93.5% of global polysilicon output. Production fell 43.8% in H1 2025 due to price collapse. A $7 billion (RMB 50B) fund is being assembled by GCL Technologies and Tongwei to buy and close ~1 million tonnes of lower-quality capacity — roughly one-third of China's total.
• Non-China: Wacker Chemie (Germany, ~80K t/yr), Hemlock Semiconductor (US, private, ~36K t/yr), OCI (South Korea/Malaysia), and previously REC Silicon (US, now shut). Combined non-Chinese capacity is under 200K tonnes est..
• REC Silicon Moses Lake: Shut down January 2025 after failing product quality tests. Capacity was ~20,000 t/yr of FBR granular polysilicon. Equipment maintained for possible future restart.

PV Tech (2025); EnergyTrend (Oct 2024); pv-magazine-usa.com (Jan 2025); Bernreuter Research via PV Tech.

Bottleneck

For polysilicon, the constraint is not capacity — there is massive oversupply. Polysilicon prices have fallen below full production cost for most manufacturers, causing shutdowns and losses across the industry. For silicon metal in the West, the constraint is electricity cost and trade protection — US silicon metal costs ~$2,751/tonne vs. ~$1,459/tonne in Asia, a gap that can exceed $650/tonne in Europe due to carbon pricing. US producers depend on antidumping duties (petitions filed April 2025 by Ferroglobe and Mississippi Silicon against imports from Australia, Laos, Norway, and Thailand) to remain competitive.

Mordor Intelligence (2026); Ferroglobe 20-F (2026).

The gap

Silicon metal: roughly balanced globally, tight in the West

Global silicon metal supply and demand are roughly balanced at ~3.5 million tonnes est.. The gap is regional: Western producers cannot compete on cost with Chinese smelters that benefit from cheap hydropower. US antidumping petitions (filed April 2025) and EU safeguard quotas (implemented November 2025) attempt to protect domestic production. If duties hold, Western silicon metal prices stay elevated at ~$2,700+/tonne; if they fail, domestic producers face margin compression against $1,400–1,500/tonne Asian imports.

Polysilicon: severe oversupply

Chinese polysilicon capacity (~3.7M tonnes) is roughly 2x actual demand (~1.9M tonnes est.). Prices fell from ~RMB 235/kg ($33/kg) in February 2023 to ~RMB 32/kg ($4.40/kg) by May 2024. As of April 2026, prices were still declining toward historical lows. Most Chinese producers are operating at a loss. The planned ~1 million tonne capacity cut could tighten supply by 2028 if executed, per Bernreuter Research.

Pricing inputs

• Silicon metal (Western): Upward pressure from trade protection; downward pressure from weak steel/auto demand. Outcome depends on antidumping duty rulings.
• Polysilicon: Chinese consolidation (if it happens) could lift prices toward $8–12/kg by 2027–2028 est.; timing depends on the GCL/Tongwei fund execution.
• Semiconductor-grade polysilicon: Structurally tighter and higher-priced than solar-grade. AI chip demand adds incremental pull; volumes are small relative to solar-grade.

The players

REC Silicon Q4 2025 Report; Ferroglobe 20-F (2026); First Solar Q1 2026 Earnings; StockAnalysis.com for share counts and market caps (Jun 2026).

The price of exposure

REC Silicon (RECSI on Oslo Bors; OTC in US as RCSIF)

Market cap ~$104M. Revenue run-rate ~$78M/yr from silicon gases only. EBITDA –$26M in 2025. Cash of $7.3M against cash burn of ~$65M/yr (FY2025 FCF). The company announced a rights issue (fully underwritten by largest shareholder Anchor AS) to reduce debt and provide liquidity. The stock has fallen ~89% over the past year. At $78M revenue, the company trades at ~1.3x trailing revenue. Silicon gas volumes are ~2,160 tonnes/year; at Q4 2025 implied pricing (~$37K/tonne from $20M revenue on 540 tonnes), the gas business generates ~$80M revenue but cannot cover the cost structure inherited from the polysilicon operation. 4.61 billion shares outstanding create dilution risk from further capital raises.

Ferroglobe (GSM)

Market cap $806M on $1.34B revenue. Net loss $177M in FY2025; EBITDA –$72M, driven by silicon metal ASP declining 10.4% to $2,924/tonne while raw materials and energy rose to 70% of sales. Running at ~65% capacity utilization. Silicon metal segment revenue fell 40.8% YoY. At $806M market cap, the stock trades at 0.6x trailing revenue. In FY2024 (a better year), Ferroglobe generated $154M adjusted EBITDA and $164M FCF, which would imply 5.2x EV/EBITDA at current prices. Pending US antidumping duties and EU safeguards could lift pricing. Forward P/E of 86x per analysts. The stock trades near its 52-week low of $3.51 (current: $4.32).

First Solar (FSLR)

Market cap $34.2B, enterprise value $32.4B. FY2025 revenue $5.22B, net income $1.53B, EBITDA $2.13B. Gross margin 40.6%. Trades at 16.1x EV/EBITDA (trailing) and 22.3x trailing earnings. First Solar does not produce silicon or polysilicon — it manufactures cadmium telluride (CdTe) thin-film panels that compete against silicon-based panels. Its relevance to this sector: CdTe gains share if silicon panel competitors are hurt by polysilicon price instability, and CdTe is immune to polysilicon supply disruption. Q1 2026 production was 4.3 GW with a 47.9 GW contracted backlog worth $14.4B. Net cash position of $2.0B.

What to deep-dive next

• Ticker mismatch: WFG (West Fraser Timber) is a lumber company with zero silicon or polysilicon exposure. The likely intended tickers are GSM (Ferroglobe) or WCH (Wacker Chemie, major polysilicon producer listed in Germany).
• Ferroglobe antidumping petition outcome: Filed April 2025 against silicon metal imports from Australia, Laos, Norway, and Thailand. A favorable ruling would directly lift Ferroglobe's silicon metal ASP above the current $2,924/tonne. Timeline and preliminary duty rates not yet public.
• Chinese polysilicon consolidation fund: The $7B capacity-closure fund led by GCL and Tongwei is the single largest variable for polysilicon prices globally. If 1 million tonnes shuts, Bernreuter Research projects shortage by 2028. Fund execution progress determines whether Western polysilicon producers (Wacker, Hemlock) see margin relief.
• REC Silicon viability: $7.3M cash, negative EBITDA, polysilicon business shut. The question is whether silicon gases alone sustain the company. Rights issue terms and dilution math need examination.
• Section 232 tariffs on polysilicon derivatives: Pending Q2 2026 decision (per First Solar). Affects whether Southeast Asian silicon-based panel imports face tariffs, which would benefit CdTe at silicon's expense.
• Silicon anode batteries: Ferroglobe's MoU with Coreshell and REC Silicon's mention of "silicon anode gases" point to a potential new demand source — silicon anodes offer ~10x the energy density of graphite anodes in lithium-ion batteries. Market is nascent; scale and timing unknown.

Sources & confidence