TCL Central Saudi Arabia Photovoltaic Crystal Chip Factory Project Signed Joint Development Agreement

On the evening of October 17th, TCL Central announced that it had signed a Joint Development Agreement with VisionIndustries to promote the joint construction of crystal chip projects in Saudi Arabia, with a target production capacity of 20GW for the first phase. Saudi VisionIndustries CEO Ayman Al Hazmi, TCL Central General Manager Shen Haoping, Chief Operating Officer Zhang Changxu, and others attended the signing ceremony

On the evening of October 17th, TCL Central announced that it had signed a Joint Development Agreement with VisionIndustries to promote the joint construction of crystal chip projects in Saudi Arabia, with a target production capacity of 20GW for the first phase. Saudi VisionIndustries CEO Ayman Al Hazmi, TCL Central General Manager Shen Haoping, Chief Operating Officer Zhang Changxu, and others attended the signing ceremony.

Milestones of TCL's Central Globalization Strategy

As a leading global manufacturer of photovoltaic materials, supplier of photovoltaic cell modules, and smart photovoltaic solution service provider, TCL Central has become an industry leader in terms of technology research and development and production capacity scale. At present, TCL Central has formed significant differentiated competitive advantages in fields such as large-sized, thinned, and N-type silicon wafers through the deep integration of G12 technology platform and Industry 4.0 production line; At the same time, as of the mid-2023 report, the crystal production capacity of TCL Central has reached 165GW, ranking first in the world in terms of silicon wafer market share. It is expected to reach 180GW by the end of 2023.

In 2022, TCL Central proposed a development strategy of "implementing the global leading strategy of photovoltaic materials and maintaining its comprehensive strength among the top 1 in the world". Among them, commercial globalization and industrial globalization strategies have become one of the important paths for the company to maintain global market competitiveness.

As early as May this year, TCL Central had already signed a cooperation term sheet with VisionIndustries, intending to jointly establish a joint venture and invest in the construction of a photovoltaic crystal chip factory project in Saudi Arabia. The Joint Development Agreement signed with VisionIndustries this time clarifies that the target production capacity for the first phase of the project is 20GW, which has extremely profound significance for promoting the globalization strategy of TCL's new energy photovoltaic industry in Central China. It will lay the foundation for TCL's "external circulation" of new energy photovoltaic business in Central China and further enhance TCL's global market competitiveness.

CITIC Securities pointed out that from the perspective of long-term supply chain security, a balanced layout of production capacity will ensure the avoidance of the risk of supply interruption due to unexpected events; At the same time, with the trend of diversified overseas photovoltaic demand, manufacturers' proximity to project locations can help improve competitiveness in different markets.

Setting a benchmark for China's photovoltaic industry to "go global"

For a long time, China's photovoltaic industry has always been in an absolute leading position globally. According to CPIA data, as of the end of 2022, China's global market share of silicon materials, silicon wafers, battery cells, and components has reached 86.95%, 97.90%, 86.69%, and 80.80%, respectively. In 2022, China's photovoltaic products were exported to over 200 countries and regions worldwide, with an export value of up to 51.25 billion US dollars, a year-on-year increase of 80.3%.

The global industrial layout has become an important strategic direction for China's photovoltaic industry to maintain global market competitiveness. In recent years, Chinese photovoltaic companies have gradually accelerated their "going global" efforts, but factors such as the supply chain system, production costs, and talent reserves have made it difficult to truly implement overseas production capacity projects, especially in the silicon wafer sector, which is more technically challenging and has a larger investment scale. Therefore, the cooperation between TCL Central and VisionIndustries also provides support and reference for the global development of China's photovoltaic industry.

Especially the smart factory built by TCL Central based on "Industry 4.0" technology has achieved automated operation of the entire production line of the chip manufacturing system, forming a production mode with fewer people and intelligence. It has strong replicability and can achieve the transfer of process technology advantages, effectively avoiding cost problems caused by factors such as land and manpower in different countries.

According to data analysis, under the same production capacity scale, TCL Central only needs about 13000 people, while competitors require 30000 to 40000 people. At the same time, the current per capita output value of TCL Central's chip factories has reached 10 million yuan/person/year, with per capita wages exceeding 20000 US dollars/year. Even in developed countries such as Europe and America with high labor costs, TCL Central still has significant competitiveness on the cost side.

Strong Cooperation Helps Global Energy Transformation

At a time when the international trend of green and low-carbon development is becoming increasingly prominent, green energy has become an important cooperation area for achieving the goals of "carbon neutrality" and "carbon peaking", as well as addressing global climate change.

The cooperation between TCL Central and VisionIndustries fully utilizes TCL Central's advanced technology, advanced manufacturing, and VisionIndustries' and its shareholders' rich regional resources and business layout in energy, hydrogen energy, seawater desalination, etc., to create a globally leading, flexible, and large-scale photovoltaic crystal chip factory, actively leveraging the "green leadership" of Chinese photovoltaic enterprises on international platforms, It has promoted the global development of China's photovoltaic industry, provided important assistance for the transformation of the global energy system and global green and low-carbon development, and contributed significant efforts to achieving the goals of "carbon peak" and "carbon neutrality", and building a community with a shared future for mankind.

Especially as a true "oil kingdom" and an economic powerhouse in the Middle East, Saudi Arabia's economic development is highly dependent on oil revenue. However, due to the significant cyclical nature of international oil prices and the increasing maturity of clean energy technologies such as photovoltaics, the trend of replacing traditional energy sources such as oil is irreversible. Therefore, for Saudi Arabia, it is urgent to break away from its single dependence on oil.

In April 2016, Saudi Arabia officially released the "Saudi Arabia 2030 Vision", aiming to achieve economic diversification and energy structure transformation, in order to promote stable and sustained economic growth. According to Saudi Arabia's plan, by 2030, the share of natural gas and renewable energy will increase to about 50%, while reducing the use of liquid fuels.

The TCL Central Saudi Arabia project has been launched in the Middle East region, creating Saudi Arabia's first photovoltaic industry chain with global leading technological advantages. This will further fill the gap in the upstream of the photovoltaic industry chain in the Middle East region, and help achieve Saudi Arabia's "2030 Vision" strategy, promoting energy transformation in Saudi Arabia, the Middle East, North Africa, Europe, and other regions.

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