Chinese solar company cuts wafer prices as industry heats up

The world's biggest solar company has slashed prices for a key component as the sector's growing capacity in the sector intensifies cost competition.

The Chinese company Longi Green Energy Technology Co. cut wafer prices by as much as 31% on Monday. Wafers are Silicon squares arranged to form solar panels, which are wired up and pieced together.

The drop comes after solar silicon prices have plummeted by almost half since early February. A number of new factories have ramped up production, causing a shortage of the material that disrupted the industry s supply chain last year.

Longi President Li Zhenguo warned on Thursday that aggressive expansion in the solar supply chain could lead to excess capacity, which forces more than half the companies in the industry out of business in the next few years.

Longi shares fell 2% in Shanghai on Tuesday. Shares of TCL's top rival in the wafer space, TCL Zhonghuan Renewable Energy Technology Co., were little changed in Shenzhen.

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