Taipei, March 9, 2010 (CENS)--It is revealed that the Formosa Plastics Group (FPG) plans to open its polycrystalline-silicon factory in Changhua County, central Taiwan, isolating the investment project from the group`s NT$280 billion (US$8.7 billion at US$1:NT$32) naphtha-cracker project.

Originally, the group hooked the polycrystalline-silicon investment project to the naphtha-cracker project. However, according to people familiar with the group`s investment plans, FPG recently changed its mind, deciding to separate the polycrystalline-silicon plan from the naphtha-cracker plan in light of uncertainty of the second-phase environmental review of the petrochemical project.

Industry insiders pointed out that although the government estimated the naphtha-cracker plan would pass the review in June this year, uncertainty remains during the review process. The polycrystalline-silicon plan, however, can get going without environmental review.

The polycrystalline-silicon project is estimated to cost NT$10-20 billion (US$312-624 million) in investment. Location of the factory is the campus of a Formosa Chemical & Fiber Corp`s factory in Changhua County.

Lee Chang Yung Chemical Co., Ltd. is another Taiwanese petrochemical manufacturer to have got involved in polycrystalline-silicon investment. The company`s NT$15 billion (US$468 million) factory will begin volume production in April at the earliest. The factory is designed to turn out 8,000 metric tons of the silicon a year, making it the island`s biggest producer of the materials for making solar cells.

Industry watchers pointed out that an increasing number of Taiwan`s new entrants in the solar-energy industry has strained domestic supply of polycrystalline silicon, a major reason behind investments of FPG and Lee Chang Yung in the material business.

They estimated both companies would likely expand into ingot manufacturing, which is the source of polycrystalline silicon wafers.

(by Ken Liu)