Oci Holdings Co. has paused its plans to list its Malaysian polysilicon business due to fluctuations in global stock markets, according to sources familiar with the matter.

The Seoul-based company has slowed preparations for the initial public offering (IPO) but has not officially canceled the process.

A spokesperson for Oci said that options for the Malaysian affiliate, including an IPO, are still being evaluated, and no final decisions have been made.

The polysilicon industry is facing challenges due to an oversupply.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Extreme polysilicon overcapacity creates challenging IPO environment

OCI’s IPO delay highlights the severe supply-demand imbalance plaguing the polysilicon industry.

Global polysilicon production capacity surged to approximately 225.6 million tons by the end of 2023, representing a 71.6% year-on-year increase1.

This massive capacity expansion has occurred predominantly in China, which now accounts for about 93% of global polysilicon production capacity1.

The industry is operating far below capacity, with Chinese polysilicon producers running at an average of just 40% of their production potential, clearly indicating severe market oversupply2.

This imbalance has driven polysilicon prices down more than 80% over two years, creating a challenging environment for OCI to achieve its targeted IPO valuation of up to 6 billion ringgit ($339 million).

2️⃣ U.S. trade policies threaten Southeast Asian solar manufacturing

OCI’s Malaysian polysilicon business faces increasing uncertainty due to escalating U.S. tariffs on solar imports from Southeast Asia.

Malaysia established itself as the third-largest producer of solar PV components globally in 2022, with significant polysilicon production capacity including OCI’s 35,000-ton facility in Sarawak3.

U.S. tariffs on Malaysian solar exports have intensified, with recent increases to 24%, creating potentially significant barriers to a key export market4.