China based GCL Poly<\/strong> is the biggest solar wafer producer in the world. GCL Poly raised its wafer capacity almost 85% in 2011.\u00a0The company\u2019s strategy of setting up plants near its major customers landed it major deals and lower the cost in the supply chain. This Chinese company\u00a0 became one the biggest producers of polysilicon and wafers<\/a> in 2010, from zero in 2008.<\/p>\n The Company has now warned its investors that it expected a \u201csubstantial\u201d loss for the year 2012. The company tried to avoid losses, by significant cost reductions earlier. The main reasons for this unavoidable circumstance are:<\/p>\n i) Significant overcapacity in the polysilicon market<\/p>\n ii) The imposition of US duties and<\/p>\n iii) European Crisis.<\/p>\n The 2012 results are expected to be out <\/strong>by the end of March. As a result of his announcement, the shares of GCL Poly have declined after a 100% rally in the last few months. GCL Poly has been running at a 50% utilization as the spot prices of polysilicon have gone below the cash costs of most producers. Most of the other big producers like Hemlock, Wacker, OCI have also reduced prodcution and halted earlier plans of expanding capacity. LDK which has a high cost poly plant has stopped production entirely as its costs are almost 100% higher than the current ASP.<\/p>\n GCL Poly might benefit if China imposes duties on imports of poly from European and US producers. However, the increase in price may not be much given the huge overcapacity. Also bigger solar panel companies might find workarounds.<\/p>\n Read more about China Solar Panel Companies<\/a><\/em><\/strong>.<\/p>\n