Daqo Cuts Losses While Betting on AI Power Infrastructure

Earnings
โดย Insider Monkey·CN·Read original
Summary · why it matters

Daqo New Energy reported second-quarter earnings on August 20, showing narrowed losses but continued sales below production cost, while management highlighted a new pivot toward AI power infrastructure and semiconductor-grade polysilicon. Revenue rose to $62.7 million from $26.7 million in the first quarter, gross loss narrowed to $82.7 million from $139.4 million, and net loss improved to $81.2 million from $88.4 million. The company holds zero debt and $1.92 billion in liquidity, which supports its patience through the downturn. Daqo joined seven other polysilicon manufacturers on August 6 in an initiative to stop below-cost sales, and a new national energy standard effective January 1, 2027, is expected to force noncompliant plants to shut down. On June 3, Daqo announced an investment agreement to build a manufacturing base for AIDC power infrastructure, including energy storage systems and solid-state transformers, and it is targeting a semiconductor-grade polysilicon market where it sees global demand of 75,000 tons against supply of 57,000 tons. However, the average selling price fell to $4.04 per kilogram from $5.96, while production cost stayed at $5.95 per kilogram, resulting in a negative 132% gross margin. Cash used in operating activities for the first half of 2026 reached $276.2 million, more than double the $105.4 million a year earlier. Management acknowledged that the qualification cycle for semiconductor-grade polysilicon is taking longer than expected, and the AIDC effort is still small, with only $30 million to $40 million earmarked for 2026.

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