The rapid price drop of polysilicon has caused close to 80% of polysilicon firms in China to halt production. As the rebound of polysilicon pricing has been weak, a China-based polysilicon firm is rumored to have filed for bankruptcy.

According to local media reports, there are currently 43 polysilicon firms in China but only eight are still operating. The cost of one ton of polysilicon is around CNY300,000 (US$47,544), but the sales price is only CNY200,000.

Due to low demand, many China-based polysilicon firms have stopped expanding capacity. In 2011, the spot price of polysilicon exceeded US$100/kg. By fourth-quarter 2011, the price had dropped to US$20-25/kg, causing many firms to suspend production.

The elimination of polysilicon firms in China has begun. The China government hoped to use mergers and acquisitions to enable small- and medium-size polysilicon firms to continue to exist. However, many large-size peers refused to comply. Polysilicon firms have been having trouble accumulating capital, commented industry sources.