The document discusses the photovoltaic (PV) market and its implications for the metallurgical silicon sector. It notes that PV demand is driving expansion of the polysilicon industry and increasing demand for metallurgical silicon as a feedstock. By 2020, metallurgical silicon demand from polysilicon production for PV is estimated to reach between 500,000-900,000 metric tons annually, equivalent to 15-30% of global metallurgical silicon demand. The document also analyzes regional PV market trends, the polysilicon industry, and considers the potential for polysilicon production in locations outside of China such as the Middle East, South America, and the Caribbean.

1. Dipl. Eng. Lou Parous
Moltekestrasse 2-4
78467 Konstanz
Germany
www.viridis-iq.de
lou.parous@viridis-iq.de
Registered Office: Konstanz
Register Court Freiburg/ Commercial Register Number:
HRB 708759
Management Board:
Dipl. Eng. Louis Parous
Dr. Wolfgang Herbst
Asian Photovoltaic Market and Outlook
Effect on Silicon Metal

2. 2© Viridis.iQ
Content
 PV market demand
 Industry expansion
 Implications for the “silicon metal” sector
 Stress Relief: New Developments in Silicon Waste Recycling
 Summary

3. 3© Viridis.iQ
Brief Introduction
Corporate Focus
Silicon Manufacturing Solar Manufacturing
Recycling Technology PV Systems Design
Industry Development
Engineering and Optimization

4. 4© Viridis.iQ
Brief Introduction
Publications and Appearances

5. 5© Viridis.iQ
Photo credit: Viridis.iQ
PV Installations
Photo credit: REC Silicon
Polysilicon
Photo credit: Shutterstock
Metallurgical Silicon
What is the Link?
mgSilicon as a feedstock for PV

6. 6© Viridis.iQ
Chemicals
 Silicones for plastics, paints,medical
applications, cookware, and insulation
 Silicon is consumed in the chemical process
and derivitives of silicon are further processed
 Wells established industry that is expanding in
the emerging markets as consumer goods
consumption rises
 Approx 2 kgs of silicon are needed for 1 kg of
Silicones
Aluminium
 Used as an alloying element to alumium for
improved properties
 Used in both primary and secondard alumium
industry
 Increasing use of alumimum – silicon alloys is
pushing higher demand of silicon
 Typically up to 12% silicon is used in cast
aluminum alloys
.
Electronics and Photovoltaics
 Key raw material for production of polysilicon
 Consumed in process
 1.2 to 1.4 kgs are needed for 1 kg of
polysilicon
 Large cost componant of polysilicon
production
 High consistancy in quality requirements
Sectors and Drivers
End Markets for mgSilicon
Metallurgical Silicon is used in a diverse number of industries. As an feedstock, its is normally consumed
in the process of making other industrial end products or consumer goods.

7. 7© Viridis.iQ
PV Installations
The end product
Photocredit:Shutterstock

8. 8© Viridis.iQ
Rapidly changing market forces
Market overview
Changing market drivers in PV
Past-to-present: Present-and-future:
 Main driver: FiTs in Europe  PV as major cornerstone in global energy-generation-mix
 Motivation of independent power producers: Generating high IRR with
attractive risk-return-profile
 Reduction of energy-bill (residential, commercial) and daytime peak-power
demand shaving (utility); IPPs protection against rising electricity prices
 Exorbitant high and volatile growth-rates that were influenced by singular
events, e.g. discretionary regulatory changes in dominating markets
 More moderate & lower growth rates ~10-20% p.a., in global diversified end-
markets
 Depiction of the transformational
period
 2015/16e tipping point upon
which motivation for installation
will be pre-dominantly a result of
economic considerations!
Annual demand profile [GW]:
source Viridis.iQ GmbH estimates

9. 9© Viridis.iQ
Healthy mid- to long-term trends
Market overview
PV installations by region
source: Viridis.iQ GmbH estimate
 Internal bottom-up model indicates a 5-
yr CAGR of at least 8% from 2013-18e
 Declining installation rates in Europe are
over-compensated by installations in
Asia & Americas
 Diversification of end-markets leads to
less volatile growth rates and better
predictability of future demand
 Significant dispersion of end-market
expectations, e.g. UBS predicts CAGR in
global PV installations of 18%
 Growth in Americas already leads to
increased traction in local
manufacturing initiatives source: UBS, Viridis.iQ GmbH estimate
Forecast comparison
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014p 2015e 2016e 2017e 2018e 2019e 2020e
GWp
Europe Asia Pacific America Middle East & Africa RoW
0
10000
20000
30000
40000
50000
60000
70000
80000
2014e 2015e 2016e 2017e
PVinstallations[GWp]
ViQ (07/2014) UBS (06/2014) DB (01/2015)

10. 10© Viridis.iQ
Monthly sector performance - Taiwan
source: Viridis.iQ GmbH estimate
 Volumes in end-market hold-up solidly
according to monthly sales statistics
from cell manufacturers in Taiwan
 Specialized Taiwanese cell
manufacturers operate at full-utilization
Mixed short-term picture
Market overview
source: Composite of pvinsights.com & energytrend.com, ViQ
-30%
-15%
0%
15%
30%
45%
60%
75%
90%
105%
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135%
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165%
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2006
2007
2008
2009
2010
2011
2012
2013
2014p
2015e
2016e
2017e
2018e
2019e
2020e
Global installations [MW] Asia Pacific Installations growth
Global vs APAC - PV Installations
 China represents ~50% of APAC
installations
 Remaining countries increasing PV
demand substantially
40%
50%
60%
70%
80%
90%
100%
110%
120%
0
100
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Dez.14
Feb.15
utilization[%]
Shipments[MW]
Implied shipments in MW Utilization
source: company data, Viridis.iQ GmbH estimates

11. 11© Viridis.iQ
0%
10%
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30%
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50%
60%
70%
0
5,000
10,000
15,000
20,000
25,000
30,000
2010 2011 2012 2013 2014p 2015e 2016e 2017e 2018e 2019e 2020e
RelativeChina%
InstalledPV(GW)
Rest of APAC
Thailand
Taiwan
Philippines
Malaysia
South Korea
Japan
China
Australia
China Rel (%)
APAC PV Demand
Market overview

12. 12© Viridis.iQ
Downstream, in search of new shores
Strategic response
 Chinese & Taiwanese downstream
manufacturers struggling with strategy
in face of trade litigations
 Other SEA countries attractive for off
shoring strategies, BUT
 Asian-centric off-shoring approach
carries seed for renewed trade
litigations as it does not address trade
imbalances
 Large-scale capacities are being
accumulated in Malaysia!
South-East-Asian flavour, in favour:
 Malaysia prominent
location in SEA
 Announced
expansions to
cumulative
production capacity
>6 GW
 Thailand attracted
some attention
 Chinese cell &
module
manufacturer to
relocate capacities
>700MW
 Philippines have PV
manufacturing cap.
 Expected to be on
short-list for
expansions in SEA
 Low labour
productivity a hurdle

13. 13© Viridis.iQ
Polysilicon
Key Raw Material
Photocredit:Shutterstock

14. 14© Viridis.iQ
High Quality Poly Capacity
source: Viridis.iQ GmbH estimate
 Polysilicon market structure gradually
cracked as Asian players entered field.
 High-volume and high-quality
producers increased with some new
entrants even catching up to the former
elite of “top tier” manufacturers.
 Resulted in a >10 fold increase in top-
tier manufacturing capacity to an 320k
mt p. a. (2005-15e) = 46 GW of c-Si
module equivalents.
 This capacity alone could be fully
utilized if PV end-markets develop as
expected by most market observers in
2015 to more than 50 GW.
Polysilicon Worldwide
Expansion
0%
20%
40%
60%
80%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
2008 2009 2010 2011 2012 2013 2014p 2015e 2016e 2017e 2018e 2019e 2020e
Asian HQ manufacturing sites Western HQ manufacturing sites share Asia
40%
60%
80%
100%
2008 2009 2010 2011 2012 2013 2014p2015e2016e2017e2018e2019e2020e
HQ Poly Capacity
HQ Poly Capacity
source: Viridis.iQ GmbH estimate

15. 15© Viridis.iQ
source: Viridis.iQ GmbH estimate
 Market shake-out still effecting EBITDA
but Asian companies weathering the
storm better
 Utilization rates in Asia exceeding the
West since early 2014.
Polysilicon Worldwide
Market overview
source: Viridis.iQ GmbH estimate
-10%
0%
10%
20%
30%
40%
50%
60%
Q1´09
Q2´09
Q3´09
Q4´09
Q1´10
Q2´10
Q3'10
Q4'10
Q1´11
Q2´11
Q3'11
Q4'11
Q1´12
Q2´12
Q3'12
Q4'12
Q1'13
Q2´13
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Q1'14
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Q3´14
EBITDA margin - Asia EBITDA margin - Western
50%
60%
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100%
110%
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Q1´12
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Utilization - Asia Utilization - Western
0
20,000
40,000
60,000
80,000
100,000
120,000
China Korea Japan Taiwan
2015 vs 2016 Poly Capacity APAC
2015
2016

16. © Viridis.iQ
Impact of mgSilicon
Polysilicon production (REC Silicon example)
Q4 2014 Estimated
component for
mgSilicon
30%
• Silicon metal prices continue to
trend upwards against demand,
energy prices

17. 17© Viridis.iQ
Value Improvements
Can Silicon Metal Impact the Production costs of Chinese PV?
• Silicon Metal input costs on
polysilicon production increases
over time
• Quality of Silicon metal can
affect polysilicon production
costs
• Price (see chart)
• Ratio of mgSil/Poly (see chart)
• Waste stream
• Fines
1.10
1.15
1.20
1.30
1.35
1.40
1.45
1.50
1.60
1.70
1.80
2.6 2.7 2.8 2.9 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4
feedstock
utilization
relativechangefromUS$10kg
price 3303 mg-Si milled
Relative Impact of MgSilicon Price and Quality
30.0%-40.0%
20.0%-30.0%
10.0%-20.0%
0.0%-10.0%
-10.0%-0.0%
-20.0%--10.0%
% change from US$10/kg
Assumptions:
US$10/ Kg Cash Costs FBR targets
Energy demand: 45 kWh/kg Poly
Electricity Price: $0.04/kWh
MgSil Price: $2.8/kg
Ratio: 1.4:1 - mgSil:Poly

18. 18© Viridis.iQ
PV Related Silicon Scenarios
Where is the PV expansion taking place?
 Regional diversification with emergence of new
high-volume PV markets leads to lower
cyclicality in end-markets
 Better predictability of PV related feedstock
needs decreases investment uncertainty for
mg-Si expansions
 Largest volumes to be absorbed in Asia Pacific
and Europe with expected mg-Si demand in
excess of 500 k tons
 Chinese Ministry of Industry and Information
Technology (MIIT) strive to have 5 polysilicon
manufacturers by 2017 that serve more than
80% of local material need (2017 Chinese PV
demand ~14.85 GW), which means that 70 000
tons of Polysilicon produced in China will stay
in China.
Mid-term high-volume PV markets
Resulting PV related mg-Si feedstock need by region
0,0%
5,0%
10,0%
15,0%
20,0%
0
200
400
600
800
1000
2014e2015e 2016e 2017e 2018e 2019e2020e
[kmt]
Europe Asia Pacific
America Middle East & Africa
RoW growth
Potential new regions
of polysilicon
production

19. 19© Viridis.iQ
Is China the only place to produce Poly?
Optional locations for Polysilicon
 The China advantage on polysilicon production is limited to
capital expenditures but this is offset by other relevant
competitive impacts
 Resource rich countries desire to upgrade their energy
reserves to support nationalistic energy policy via
renewables…..outsourcing energy to China is no longer
attractive
 Trade barriers still a big concern
 Only significant advantage China has left is lower CAPEX
costs, lax environmental and building standards
 Even low cost financing is being offered elsewhere
 Internationalization of PV demand coupled with increased
domestic demand of PV in China opens door for other
locations
Middle East • Energy Costs*: $0.03-
$0.04/kWh
• National policies to favor
upgrading of energy/natural
resource reserves
• Large potential regional
downstream PV markets
• Trade issues minimal
Caribbean • Energy Costs*: $0.03-
$0.04/kWh
• National policies to favor
upgrading of energy/natural
resource reserves
• Large potential regional
downstream PV markets
• Trade issues minimal
South America • Energy Costs*: $0.03-
$0.04/kWh
• National policies to favor
renewables
• Large potential regional
downstream PV markets
• Trade issues minimal
*Energy intensive industries

20. 20© Viridis.iQ
Photocredit:Shutterstock
Metallurgical Silicon
Where it starts

21. 21© Viridis.iQ
Metallurgical Silicon
PV Impact
 Sense Check: In 2020, more mgsilicon will be
consumed by the PV sector that that
consumed by the Chemicals sector in 2004.
 High/Low estimates for MgSilicon demand
from Polysilicon production will be between
900kts and 500 kts by 2020
 …which is the equivalent of ~40% – ~20% of
the western world production today.
 …and will represent ~30% – ~15% of the
global mgSilicon demand by 2020
 Theoretical impact of APAC PV demand on
mgSilicon demand levels off at 50% by 2020.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
0.00
100.00
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600.00
2006
2007
2008
2009
2010
2011
2012
2013
2014p
2015e
2016e
2017e
2018e
2019e
2020e
poly-Si demand [k tons] LOW mg-Si demand from PV relative APAC related PV mg-Si demand

22. 22© Viridis.iQ
mgSilicon Greenfield Growth
Will all of these happen?
New Silicon Plants (planned or being studied)
PCC Islandic Silicon
FerroAtlantica
Mississippi
Silicon
Saudi Silicon
“Oman”
SIMA
“Trinidad”
ThorSil United Silicon
 Greenfield expansions will face
some challenges
 Lack of operations
expertise
 Lack of track record in
production
 Western capacity expansions
planned by 2020
 Possible: ~ 400 kts
 Probable: ~ 150 kts
 ~140kts Chinese Expansions
added in 2014 (source: D. Bajolet)
“China”

23. 23© Viridis.iQ
High impact value on Poly-Si compared with growing number of producers and relative lack of
understanding of mgSilicon offers signs of ascendant leverage for producers against the
Chemical sector that has been the main force of negotiation power
Silicon Metal Producers
Might have more leverage
Industry End Markets Chemical Aluminum PV/Semi
Number of Buyers Few Many Moderate (will increase)
Buying Power Very High Medium Low
Impact of MgSilicon on costs Very High (20%)1 Low (3% - 12%) Very High (20% or more)
Growth Strong (6.8%)5 Strong (7%)4 Very Strong (14%)6
Technical understanding
of MgSil
High Low2 Low3
Quality Requirements High Low2 Varies
1 CRU estimate
2 Some exceptions (EGA, Alcoa, others)
3 Notable exceptions (Wacker)
4 http://www.forexlive.com/blog/2013/10/08/alcoa-affirms-forecast-of-7-growth-in-global-aluminum-demand/
5 http://www.marketsandmarkets.com/PressReleases/silicone.asp
6 Based on various sources for Poly-Si growth rates – Not PV industry as a whole

24. 24© Viridis.iQ
Impact of expansion on PV sector
Don’t celebrate yet!
 There is a relative explosion of greenfield silicon metal activity
 That could add approximately 400,000 tons of new silicon capacity by 2020
 But that does not mean 400,000 tons evenly split among the Chemical, Polysilicon and
Aluminum industries
 But some activity is also based on collaborative approach (mgSi for poly-Si)
Some greenfield
plants will only
support local non-PV
demand or will be
limited in export
permissions
Poor knowhow in
operations and mistakes
in technology and/or
engineering choices can
limit product grade
flexibility as well as
project schedule
Captive Supply Knowhow Limitations Raw Material Limitations
Access to higher quality
raw materials often
underestimated by new
projects…not to mention
lower volumes never get
best procurement prices

25. 25© Viridis.iQ
 Technology developments on
recycling continuing
 Milling
 Kerf
 If used as mgSilicon, total recycled
kerf and milling wastes could be
equivalent to several Silicon Metal
smelters
 Capex for recycling can be more
than 60% lower than for new
smelting plants
Stress Relief
Can recycling add capacity to the market?

26. 26© Viridis.iQ
Milling/Grinding Fines Kerf Wastes
PhotoCredit:Viridis.iQGmbH
PhotoCredit:FivesGroup,France
Stress Relief
Can recycling add capacity to the market?
 Milling wastes are usually not re-
consumed by the silicon metal
producer
 Some Direct chlorination producers
can use large portions of milling fines
 Kerf wastes can be cleaned of SiC
contamination to return the remaining
silicon to standard silicon metal
specifications
 Recycled kerf can also have the
added benefit of reduced dopant
levels that can reduce distillation
costs in polysilicon
2015 40,000 tons/year 90,000 tons/year
2020 80,000 tons/year 210,000 tons/year

27. 27© Viridis.iQ
CAGR PV market (%) PV Utilization Rates (%)
2020: MgSil expansion (kts) % MgSil Cost on Polysilicon
2020: PV pull on mgSilicon (%)
Possible Stress Relief (kts)
~150
~400
~290
>10% 30+95
30
Summary
By the Numbers

28. Dipl. Eng. Lou Parous
Moltekestrasse 2-4
78467 Konstanz
Germany
www.viridis-iq.de
lou.parous@viridis-iq.de
Registered Office: Konstanz
Register Court Freiburg/ Commercial Register Number:
HRB 708759
Management Board:
Dipl. Eng. Louis Parous
Dr. Wolfgang Herbst
Thank You!