REC Silicon to shut down its polysilicon business in Butte, Montana

REC Silicon has announced that its subsidiary, REC Advanced Silicon Materials LLC, is to shut down its polysilicon production capacity at Butte, Montana facility, primarily due to the regional structural imbalance in supply and demand for electricity.
REC Silicon to shut down its polysilicon business in Butte, Montana
Courtesy of REC Silicon.

The shutdown of the polysilicon business is part of REC Silicon's strategy to ensure long-term profitable operations. Discontinuing the polysilicon production at Butte will significantly reduce annual energy consumption and operating costs.

The polysilicon business will continue to produce for approximately six to nine months to fulfill polysilicon supply obligations to the company’s customers. After the supply obligations are satisfied, the company expects that the workforce in Butte will be reduced accordingly, along with some others across the company that support the Butte business line. The company is working out the details with respect to the shutdown and will provide additional information to impacted stakeholders as it becomes available.

“The decision to shut down the polysilicon business in Butte was very difficult from a human perspective because of the impact on REC’s workforce” said Kurt Levens, CEO. “The team in Butte has been resilient and resourceful, making vast improvements in our offerings and gaining a significant presence with key customers while balancing a focus on quality and cost. I am grateful for their hard work and dedication. We did everything in our power to return profitability to the polysilicon business in Butte, however, forecasts for sustained high electricity costs that are outside of our control necessitated this decision. After the transition has been fully executed, we expect an accretive impact to our earnings. Most importantly, we will have full focus on Butte’s globally leading silicon gases business. We will work towards executing more investment and product opportunities available due to that leading position as well as the tailwinds the Chips, IRA and Infrastructure Acts are providing.”

The short and mid-term increased electricity pricing in the region is not expected to abate and will not allow for profitable operations in the polysilicon business line.

The company took short-term mitigative measures that included electricity hedging, optimised production, and increased sales prices. These efforts minimised the losses in the short-term, however, the decision taken is primarily about the mid to long-term viability of a very power-intensive polysilicon process located in a high electricity cost region, particularly relative to alternative manufacturers and regions.

REC said that, in keeping with its long relationships and significant continuing presence in the semiconductor materials supply chain, the company will execute the shutdown in a manner that balances the best interests of all stakeholders and previous commitments.

For additional information:

REC Silicon

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