REC Silicon’s Q1 Loss Widens to $34.4 Million on Slow Semiconductor Market
The company's polysilicon production dropped 38% YoY in Q1 2023
Norway-based polysilicon manufacturer REC Silicon‘s net loss widened to $34.4 million for the first quarter (Q1) of the financial year (FY) 2023 compared to the net loss of $8.6 million year-over-year (YoY), primarily due to a drop in sales owing to a slowdown in the semiconductor market.
During the quarter, the company’s total polysilicon production dropped 38% YoY to 244 metric tons (MT). Its polysilicon sales declined to 183 MT, down 36% YoY.
The company’s revenue for the January-March period declined by 16% YoY to $29.1 million.
The silicon gas sales for the quarter fell by 16% YoY to 640 MT.
The semiconductor-grade polysilicon sales volume totaled 226 MT, a drop of 39% YoY.
The earnings before interest, taxes, depreciation, and amortization (EBITDA) for the January-March period were recorded at $23 million, compared to a loss of $3.6 million during Q1 2022.
The semiconductor materials segment contributed a loss of $3.4 million to the Company’s EBITDA during Q1 2023.
Commenting on the results, Kurt Levens, CEO of REC Silicon, said, “The semiconductor market is still struggling with excessive inventories, which is muting demand for our silicon gases. EBITDA for the quarter was negative, although slightly improved from last quarter. The company is striving to take action to improve EBITDA in the short term. However, such action will take some time before impacting the bottom line. Restart activities for Moses Lake are progressing well and are on schedule.”
The company is working to restart manufacturing polysilicon for the solar energy markets from its Moses Lake, Washington facility. It also plans to restart Fluidized Bed Reactor (FBR) polysilicon production in Q4 of 2023.
Current activities include the execution of engineering, procurement, and construction for FBR upgrades. The company targets a ramp to 50% operation during Q2 2024 and a ramp to 100% during Q4 2024.
REC Silicon reported a net loss of $26 million for Q4 2022 compared to a net loss of $13.1 million YoY.
Earlier, REC Silicon had joined hands with Violet Energy Corporation to develop an integrated solar manufacturing supply chain.