China-based polycrystalline silicon (poly-Si) suppliers are evaluating the possibilities of expanding capacity overseas with the China government recently releasing new regulations and standards for poly-Si manufacturing investments within the country. Taiwan reportedly is one of the locations being considered since the island is a major solar cell manufacturer and cross-strait relations have improved in recent years, according to industry sources.

Under the new regulations, no new entry or manufacturing capacity expansion projects will be approved prior to the release of the government's latest list of investment projects. However, special permits could be granted to projects that meet specific requirements in technological innovations, energy conservation and environmental protection. In addition, the first-tier poly-Si makers in China are showing little interest in acquiring smaller manufacturers in the country to expand capacity, claiming that the cost of consolidation could be higher than establishing new plants.

In 2007, Norway's REC grabbed headlines when it was rumored to be interested in setting up a poly-Si plant in Taiwan. Though the plan eventually fell through, it highlighted Taiwan's need for more sufficient solar material supply. Currently, LCY Chemical's subsidiary is the only company in Taiwan that has successfully mass produced poly-Si.