Silicon Material Giant Makes a Move! Tongwei Plans to Acquire Qinghai Lihua, Duan Yong Wants to Return to His Old Company?

On the evening of February 24th, Tongwei Co., Ltd. (600438.SH), a leader in silicon materials, plans to acquire 100% equity of Qinghai Lihao Co., Ltd. (referred to as “Qinghai Lihao”) and raise supporting funds. The company is planning to purchase through issuing shares and paying cash.

To avoid significant impact on the company’s stock price, Tongwei’s shares, convertible bonds, and convertible bond conversions will be suspended from the opening of trading on Wednesday, February 25, 2026, with an expected suspension period of no more than 10 trading days.

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Silicon Material Leader Makes Acquisition Move!
Duan Yong Wants to Return to His “Old Employer”?

Tongwei Co., Ltd. is the world’s leading producer of polycrystalline silicon and solar cells.

According to Tongwei’s official website and annual report data, as of June 2025, Tongwei has an annual high-purity silicon capacity of over 900,000 tons, solar cell capacity of over 150 GW, and module capacity of over 90 GW. In 2024, the company sold 467,600 tons of high-purity silicon, a 20.76% increase year-over-year, accounting for about 30% of the national market and holding the world’s top market share. The company’s high-purity silicon output has ranked first globally for many years, and its cell shipments have been the world’s number one since 2017; in terms of modules, the company’s shipments rank among the top five worldwide.

Qinghai Lihao also has a significant capacity. Public data shows that by the end of 2025, Qinghai Lihao had built and put into operation a high-purity silicon capacity of over 200,000 tons, with an additional 100,000 tons under construction, ranking in the top ten in the industry.

Qinghai Lihao’s official website states that the company was established in April 2021, mainly engaged in the research, production, and sales of photovoltaic-grade high-purity silicon and electronic-grade polysilicon, and is a key investment project in Qinghai Province. The company is located in the Nanchuan Industrial Park, Xining Economic and Technological Development Zone, Qinghai, covering an area of 2,600 acres, with a planned total investment of 20 billion yuan. It plans to build an annual production of 200,000 tons of photovoltaic-grade high-purity silicon and 2,000 tons of electronic-grade high-purity silicon, with an expected annual output value of about 20 billion yuan.

Notably, Qinghai Lihao’s wholly owned subsidiary in Yibin, Sichuan, Sichuan Qinghai Lihao Co., Ltd., is investing in a project with an annual capacity of 200,000 tons of photovoltaic-grade high-purity silicon, 5,000 tons of electronic-grade high-purity silicon, and 250,000 tons of industrial silicon. The company states that this project will further promote the extension, supplementation, and strengthening of Yibin’s new energy industry chain, helping Yibin develop into a national-level silicon photovoltaic industry cluster worth hundreds of billions.

Regarding ownership structure, Qichacha data shows that Chint New Energy Technology Co., Ltd. is the largest shareholder of Qinghai Lihao, holding 10.08%. Founder and Chairman Duan Yong directly owns about 4.79%, and the company also has dozens of corporate and individual shareholders.

Source: Tongwei 2021 Annual Report

Nandu Bay Finance Reporter notes that Qinghai Lihao’s founder and chairman, Duan Yong, previously worked for Tongwei for many years, served as a director of Tongwei Co., Ltd., and was chairman of Yongxiang Co., Ltd., a subsidiary of Tongwei, and was once the “top person” in Tongwei’s silicon business.

Industry Deeply Entrenched in “Involution,” Mergers and Acquisitions Help Clear Silicon Capacity?

In recent years, the photovoltaic industry has been suffering from “overcapacity” and “price wars,” and “counter-involution” has become a consensus. Public data shows that the price of polysilicon dropped from a peak of 300,000 yuan/ton in 2022 to as low as 35,000 yuan/ton, breaking below many companies’ cost lines, forcing some to halt production due to losses.

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How to “counter-involution”? In the silicon material segment, the industry has considered “stockpiling” to regulate supply. In December 2025, Beijing Guanghe Qiancheng Technology Co., Ltd. was established, with shareholders including photovoltaic and polysilicon companies such as Tongwei, Qinghai Lihao, GCL, Daqo New Energy, and Xinte Energy, with backing from the China Photovoltaic Industry Association. According to the association, the establishment of Guanghe Qiancheng marks the official launch of the long-planned “Polysilicon Capacity Integration and Acquisition Platform,” seen as a key solution to break the vicious cycle of “involution” in the industry.

However, just a month later, in January 2026, six leading silicon companies—Tongwei, GCL Technology (03800.HK), Daqo New Energy (688303.SH), Xinte Energy (01799.HK), Asia Silicon Industry (Red Lion), and Orient Hope—were summoned by the State Administration for Market Regulation and asked not to fix capacity, utilization rates, production, sales, or prices, and to refrain from coordinating on prices, costs, or sales volumes.

Now, Tongwei’s plan to acquire Qinghai Lihao is seen by some analysts as another way to promote orderly capacity reduction, or as a feasible path to reshape the current photovoltaic cycle. Others believe that, based on Tongwei’s previous cyclical bottom investments, it is a strategic move to consolidate its leading position. According to Nandu Bay Finance Reporter, in 2013, Tongwei acquired Hefei Saiwei Battery Factory during a cyclical downturn, establishing its dominance in the battery segment.

However, amid widespread industry losses, the success of this acquisition remains uncertain. In August 2024, Tongwei announced plans to increase capital to gain control of leading battery company Runyang Co., Ltd., with a total transaction amount expected not to exceed 5 billion yuan, but the deal ultimately failed. Tongwei stated that “after multiple rounds of detailed and comprehensive negotiations, some business terms could not be agreed upon.”

Tongwei also emphasized that this transaction is still in planning, and the company has signed a letter of intent with the potential transaction parties—Duan Yong, Hainan Zhuoyue Enterprise Management Partnership (Limited Partnership), and Hainan Haoyue Enterprise Management Partnership (Limited Partnership)—with the final transaction subject to the disclosures in the restructuring plan or report.

Written by: Nandu Bay Finance Reporter Zhang Haixia