--- title: "Hoshine Silicon VS Dongyue︱Silicon Industry Duopoly Under Profit Pressure! How to Break the Deadlock?" type: "News" locale: "en" url: "https://longbridge.com/en/news/267661105.md" description: "Hoshine Silicon and Dongyue face profit pressure. Although the production of new energy vehicles has increased demand for silicon, the oversupply in the silicon industry has led to price declines. Hoshine Silicon has the largest production capacity, but vertical integration has become a burden. The development of the photovoltaic industry affects silicon price fluctuations" datetime: "2025-11-27T09:25:41.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/267661105.md) - [en](https://longbridge.com/en/news/267661105.md) - [zh-HK](https://longbridge.com/zh-HK/news/267661105.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/267661105.md) | [繁體中文](https://longbridge.com/zh-HK/news/267661105.md) # Hoshine Silicon VS Dongyue︱Silicon Industry Duopoly Under Profit Pressure! How to Break the Deadlock? This image may be generated by AI Author / Jackfruit under the Starry Sky Editor / Starry Sky of Spinach Typesetting / Egg Yolk Puff under the Starry Sky According to data from the China Association of Automobile Manufacturers, from January to October this year, China produced a total of 13.015 million new energy vehicles, a year-on-year increase of 33.1%. The overall silicon usage per new energy vehicle is about 3-5 times that of traditional fuel vehicles, especially the usage of **silicone** can reach 5-10 times that of traditional fuel vehicles. Therefore, the significant increase in new energy vehicle production is undoubtedly a huge boost for the long-depressed domestic silicon industry, especially silicone. However, the third-quarter reports of the two silicone giants, # **Hoshine Silicon** (603260) with strategic missteps and # **Dongyue** (300821) with sudden accidents, are not looking good. Hoshine Silicon holds the **most complete industrial chain** and the largest production capacity, making it the overall leader in the domestic silicon industry. Its development trajectory in recent years is undoubtedly a microcosm of the entire industry. **1\. Hoshine Silicon: Vertical Integration Becomes a Burden** The domestic silicon industry was originally developing steadily and without turbulence. However, China's photovoltaic industry began to develop rapidly in 2013 and entered an explosive period in 2020. From 2021 to 2024, China's newly installed photovoltaic capacity totaled 688.2GW, driving the demand for #polysilicon and causing industrial silicon prices to soar, with polysilicon still being the largest use of industrial silicon today. Other demands generated by #new energy vehicles and #smart grid construction have collectively pushed silicon prices to nearly 60,000 yuan/ton in 2021, reaching a historical peak. The main cost of industrial silicon is **electricity**, and China's electricity prices have remained stable for many years, leading to a **rapid expansion of domestic silicon capacity**. Although during the same period, the overseas photovoltaic market also had 776.8GW of newly installed capacity, and Chinese photovoltaic manufacturers quickly occupied 80% of the global market share, domestic silicon capacity soon became oversupplied, causing industrial silicon prices to plummet since 2022. Currently, domestic industrial silicon capacity is about 9.26 million tons, with an operating rate of only about 44%. The price of industrial silicon has already fallen to less than 8,000 yuan/ton this July. As an industry leader, Hoshine has an industrial silicon capacity of 1.22 million tons and an organic silicon monomer capacity of 1.73 million tons. Industrial silicon, which is silicon in its elemental form, is the raw material for all silicon products, with downstream processing having two main directions: - Industrial silicon → organic silicon monomer → organic silicon intermediates (DMC) → organic silicon deep processing products; - Industrial silicon → polysilicon → photovoltaic cells In addition, industrial silicon is also used to produce silicon-aluminum alloys. Hoshine originally enjoyed the advantage of a complete industrial chain, but while revenue has grown over the past four years, profits have continuously declined, showing a clear case of **increasing revenue without increasing profit** In the first three quarters of this year, due to the continuous decline in silicon prices, Hoshine's revenue decreased by 25.35% year-on-year, and it recorded a loss in its third-quarter report for the first time, with a net profit attributable to shareholders of -321 million yuan. In this situation, the massive industrial silicon capacity has instead become a heavy burden. **II. Dongyue: Focused on silicone, with minimal profit** In the first half of the year, Hoshine's industrial silicon revenue was 4.009 billion yuan, accounting for 41.01%; while the silicone business revenue was 4.662 billion yuan, accounting for 47.69%. The silicone business has become another major pillar for Hoshine, but it faces competition from Dongyue. In the first three quarters, Dongyue's total revenue was 3.027 billion yuan, with its product line starting from silicone intermediates and extending to downstream deep-processing products, fully **focusing on silicone**, making it a strong player in this field. Due to the overcapacity issue in silicone as well, prices have also been on a downward trend. In the first three quarters of 2025, Dongyue's revenue decreased by 24.76% year-on-year, comparable to Hoshine. However, benefiting from the decline in industrial silicon prices, it did not incur losses. Currently, the domestic silicone capacity utilization rate is about 72%, much better than that of industrial silicon. Therefore, Dongyue's gross profit margin decreased from 6.27% in 2024 to 4.85% in 2025, which is far better than Hoshine's overall industry chain gross profit margin of 20.54% to 8.19%. Hoshine's losses are primarily due to the **plummeting industrial silicon prices**. In Q3 2025, the average price of industrial silicon was 7,933 yuan/ton, a year-on-year decrease of 25.3%. Considering that Hoshine's overall gross profit margin over the past two years has only been slightly above 20%, it has been challenging to avoid negative gross profit. Hoshine did not disclose the reasons in its financial report, but it is likely because some existing production lines have already **fully depreciated**, reducing costs. On the other hand, Hoshine's **debt ratio is very high**. Since 2021, Hoshine's long-term borrowings have surged, and its debt ratio has now exceeded 60%, leading to a financial expense rate as high as 4.89%, which directly resulted in the company's losses. In contrast, Dongyue's debt ratio is only 19.39%, and its financial expenses have consistently been negative. In fact, if it weren't for a major fire in July, Dongyue's performance would have been even better, while Hoshine's high debt stems from an aggressive expansion in 2021 **III. Hoshine's Strategic Missteps and Dongyue's Fire Incident** In 2021, facing soaring industrial silicon prices and a promising photovoltaic industry, Hoshine launched a 5,000-ton polysilicon project; in 2022, as silicon prices began to plummet, Hoshine decided to **accelerate its entry into the photovoltaic industry**, directly "leaping forward" its polysilicon planned capacity to 200,000 tons, with planned investments reaching 17.5 billion yuan. However, Hoshine's photovoltaic project is set to commence production in 2024, by which time the photovoltaic industry has already been devastated by a host of manufacturers represented by # **LONGi Green Energy** (601012) and # **JA Solar Technology** (002459), making it difficult for Hoshine to break through. In the mid-2025 report, the photovoltaic business only generated revenue of 1.217 billion yuan, accounting for 13.52%. In desperation, the company strategically **suspended some production lines**. However, the suspended production lines still incur depreciation costs, and in the first half of 2025, the photovoltaic business suffered losses exceeding 600 million yuan, even experiencing a bizarre gross margin as low as -110.08%. According to accounting standards, significant impairment should have been recognized for photovoltaic-related assets at this time, but not only was there no impairment recorded in the mid-report, a portion of the inventory impairment for 2024 was reversed, which is a typical **profit adjustment measure**. On the other hand, on July 20 of this year, a **fire incident** in the production workshop of Dongyue's Phase III B bed directly led to the suspension of 300,000 tons of organic silicon monomer capacity, equivalent to half of the company's total capacity (600,000 tons/year). However, the company stated in its third-quarter performance forecast that it could complete the renovation and resume production by the end of 2025. Therefore, the costs that enterprises face due to strategic missteps and sporadic incidents are different. Due to the fierce competitive landscape of the photovoltaic industry, Hoshine's massive investment in the photovoltaic project has resulted in significant liabilities and idle capacity, which will likely not yield ideal returns for a long time, becoming a huge drag on the company's performance and limiting its development potential. In contrast, Dongyue stands to benefit from the end of capacity expansion in the organic silicon industry, improved operating rates, and sustained demand, and is expected to achieve a quicker performance recovery after resuming production. Note: This article does not constitute any investment advice. The stock market has risks; investors should proceed with caution. 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