Daqo New Energy Corp. (DQ) Q2 2026 Earnings Report, Transcript and Summary

Welcome to the Daqo New Energy Second Quarter 2026 Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jessie Zhao, Investor Relations Director. Please go ahead.

Hello, everyone. I'm Jessie Zhao, the Investor Relations Director of Daqo New Energy. Thank you for joining our conference call today. Daqo New Energy just issued its financial results for the second quarter of 2026, which can be found on our website at www.dqsolar.com. Today, attending the conference call, we have our Chairman and CEO, Mr. Xiang Xu; our Deputy CEO, Ms. Anita Zhu; our CFO, Mr. Ming Yang; and myself. Today's call will begin with an update from Mr. Xu on market conditions and company operations, followed by a translation from Ms. Zhu from Mr. Xu, and then Mr. Yang will discuss the company's financial performance for the quarter. After that, we will open the floor to Q&A from the audience. Before we begin the formal remarks, I would like to remind you that certain statements on today's call, including expected future operational and financial performance and industry growth are forward-looking statements that are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding this and other risks is included in the reports or documents we have filed with or furnished to the Securities and Exchange Commission. These statements only reflect our current and preliminary view as of today and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties. All information provided in today's call is as of today, and we undertake no duty to update such information, except as required under applicable law. Also during the call, we will occasionally reference monetary amounts in U.S. dollar terms. Please keep in mind that our functional currency is the Chinese RMB. We offer those -- will offer these translations into U.S. dollars solely for the convenience of the audience. Now I will turn the call to our Chairman and CEO, Mr. Xiang Xu. Mr. Xu, please go ahead.

[Foreign Language]

Hello, everyone. This is Anita, and I'll now translate our Chairman, Mr. Xu's remarks. [Interpreted] In the second quarter of 2026, market sentiment across the solar PV industry remained cautious amid weak domestic demand and elevated inventory levels, which drove prices lower across the solar value chain. Despite these headwinds, we resumed sales in June, delivering a sequential increase in revenue and the narrowing of our quarterly operating and net losses. Throughout this period, we continued to maintain a robust and healthy balance sheet with 0 debt. As of June 30, 2026, we held a cash balance of $555.3 million, short-term investments of $250 million, bank notes receivables of $71.7 million, held-to-maturity investments of $51 million and fixed-term bank deposit balance of $994.8 million. Together, these readily convertible assets totaled USD 1.9 billion, providing us with ample liquidity, confidence and strategic flexibility to navigate the current market downturn. On the operational front, we continued to take proactive measures to navigate challenging market conditions with our nameplate capacity utilization rate operating at approximately 57% during the period. Total production volume at our 2 polysilicon facilities was 43,675 metric tons for the quarter, exceeding our guidance range of 35,000 metric tons to 40,000 metric tons with polysilicon market prices remaining below production costs since the first quarter of 2026. We initially refrained from engaging in the below cost sales in line with top Chinese self-regulation guidelines and adopted a disciplined wait-and-see approach pending further implementation of the national anti-involution policy; however, after an extended period without clear policy updates, we adjusted our sales and pricing strategies toward a more market-oriented approach in June. As a result, our sales volume increased from 4,482 metric tons last quarter to 15,190 metric tons with average selling price falling to USD 4.04 per kilogram. Our polysilicon transaction and shipment volumes have continued to pick up in the third quarter, reflecting increased confidence in the quality and an ongoing preference for products from our customers. On the cost side, total production costs remained flat sequentially at USD 5.95 per kilogram with cash cost edging down by 0.4% to USD 4.57 per kilogram and manufacturing costs in RMB terms declining slightly. In light of the current market dynamics, we expect total polysilicon production volume in third quarter of 2026 to be approximately 40,000 metric tons to 45,000 metric tons. For the full year 2026, we expect production volume to be in the range of 160,000 metric tons to 180,000 metric tons. Polysilicon market prices came under further downward pressure during the second quarter with N-type polysilicon prices falling from RMB 35 to RMB 37 per kilogram at the end of the first quarter to RMB 31 to RMB 34 per kilogram at the end of the second quarter. Amid subdued demand, depressed pricing and accumulated industry-wide inventories, polysilicon producers operated at a low utilization rate with aggregate output of 538,000 metric tons in the first half of 2026, representing a 9.8% year-on-year increase -- decrease. As we make our way through the third quarter, the continued rollout of anti-involution measures is gaining momentum. In July, a series of mandatory national standards were issued for energy consumption and product efficiency across the solar PV value chain, including the final official version of a new standard setting energy consumption limits per unit of polysilicon output, which will take effect on January 1, 2027. Polysilicon manufacturers whose unit energy consumption exceeds 6.3 kgce/kg must complete a corrective improvement by that date or face the risk of plant shutdown. Notably, this threshold of 6.3 kgce/kg is stricter than the 6.4 kgce/kg proposed in the draft, signaling regulators' commitment to accelerating the phase out of inefficient capacity. On July 27, the China Photovoltaic Industry Association issued the general principles for Cost Accounting Models in the Photovoltaic Industry, an initiative to regulate market competition and advance standardized industry governance that lays the foundation for price regulation enforcement. On July 31, the State Administration for Market Regulation issued price compliance guidelines for the solar PV sector, promoting a structural shift from price competition to value-driven differentiation. The SAMR emphasized that solar PV companies must conduct price-compliance self-reviews and curb irrational low-price competition, and that the CPIA should strengthen industry self-regulation, promote the General Principles, and guide companies away from illegal pricing practices such as below-cost dumping. The SAMR also indicated that it will take enforcement action against non-compliant entities. Together with seven other polysilicon manufacturers, we jointly signed an initiative to eliminate below-cost sales and fully comply with energy consumption standards on August 6. As a result of these collective measures, polysilicon prices are beginning to show signs of a recovery, with spot prices stabilizing and forward prices rebounding by more than 10% from their recent low. We are also diversifying beyond our core polysilicon business to hedge against solar PV cyclicality, targeting the fast-growing AI data center, power infrastructure market. On June 3, 2026, we announced the signing of an investment agreement to establish a manufacturing base focused on the R&D, manufacturing and sale of next-generation energy solutions and related equipment for AIDCs. This includes energy storage systems, solid-state transformers, and solid-state circuit breakers. These technologies support the industry's transition to high-voltage direct current architecture, such as the 800V DC standard advanced by NVIDIA and other leading AI infrastructure providers. The platform is anchored by Daqo Group, our affiliated entity under common beneficial ownership with Daqo New Energy Corp., which brings over 40 years of power equipment manufacturing expertise, established technology, and deep talent and customer relationships to accelerate our entry into this segment. We view AIDC power infrastructure as a structural growth opportunity that complements our core business and broadens our earnings base. Consistent with our strong track record having navigated several polysilicon cycles, we intend to pursue this expansion in a disciplined manner that preserves our balance sheet strength. Despite a challenging environment, the solar PV industry continues to exhibit compelling long-term growth prospects. Growing vulnerabilities in global energy markets have sparked widespread concerns about national energy security, in which the solar PV and renewable energy sectors can play a crucial role. As one of the world's lowest-cost producers of the highest-quality N-type polysilicon, backed by a robust balance sheet and zero debt, we remain optimistic about the sector and are well positioned to capitalize on the anticipated market recovery and long-term growth opportunities. We will continue to strengthen our competitive edge through advancements in high-efficiency N-type technology and cost optimization via digital transformation and AI adoption. As the world accelerates its transition to clean energy, we are confident in our ability to play a leading role in shaping that future. And now I'll turn the call to our CFO, Mr. Ming Yang, who will discuss the company's financial performance for the quarter. Ming, please go ahead.

Thank you, Anita, and hello, everyone. This is Ming Yang, CFO of Daqo New Energy. We appreciate you joining our earnings conference call today. I will now go over the company's second quarter 2026 financial performance. Revenues were $62.7 million compared to $26.7 million in the first quarter of 2026 and $75 million in the second quarter of 2025. The increase in revenue compared to the first quarter of 2026 was primarily driven by higher sales volume as the company resumed normal sales activities starting in June following a prolonged period with no new policy development. Gross loss was $82.7 million compared to $139 million in the first quarter of 2026 and $81.4 million in the second quarter of 2025. Gross margin was negative 132% compared to negative 520% in the first quarter of 2026 and negative 108% in the second quarter of 2025. The sequential improvement in gross margin was primarily due to a decrease in provisions for inventory impairment, which was $55.7 million in the second quarter of 2026 compared to $98.9 million in the first quarter of 2026. SG&A expenses were $15.8 million compared to $12.2 million in the first quarter of 2026 and $32 million in the second quarter of 2025. The sequential increase was primarily due to higher sales volume in the second quarter of 2026. The year-over-year decrease was also due to the company's recognizing $18.6 million in noncash share-based compensation costs related to its share incentive plan in the second quarter of 2025. R&D expenses were $1.6 million compared to $0.8 million in the first quarter of 2026 and $0.8 million in the second quarter of 2025. The increase is primarily due to R&D of next-generation energy solutions for AIDC power infrastructure. R&D expenses can vary from period to period and reflect R&D activities that take place during the quarter. Loss from operations was $98 million compared to $150.8 million in the first quarter of 2026 and $115 million in the second quarter of 2025. Operating margin was negative 156% compared to negative 560% in the first quarter of 2026 and negative 152% in the second quarter of 2025. Net loss attributable to Daqo New Energy Corp. shareholders was $81 million compared to $88 million in the first quarter of 2026 and $76.5 million in the second quarter of 2025. Loss per basic ADS was $1.20 compared to $1.31 in the first quarter of 2026 and $1.14 in the second quarter of 2025. Adjusted net loss attributable to Daqo New Energy shareholders, excluding noncash share-based compensation costs, was $81 million compared to $88.4 million in the first quarter of 2026 and $57.9 million in the same quarter of 2025. Adjusted loss per basic ADS was $1.20 compared to $1.31 in the first quarter of 2026 and $0.86 in the same quarter of 2025. EBITDA was negative $29 million compared to negative $83 million in the first quarter of 2026 and negative $48 million in the same quarter of 2025. EBITDA margin was negative 46.8% compared to negative 311% in the first quarter of 2026 and negative 64% in the same quarter of 2025. Now on the company's financial condition. As of June 30, 2026, the company had $555 million in cash and cash equivalents compared to $559.4 million as of March 31, 2026, and $598.6 million as of June 30, 2025. And as of June 30, 2026, short-term investment was $250 million compared to $288 million as of March 31, 2026, and $418 million as of June 30, 2025. As of June 30, 2026, note receivable balance was $71.7 million compared to $20.8 million as of March 31, 2026, and $49 million as of June 30, 2025. Note receivable balance, which represents bank notes with maturity within 6 months. As of June 30, 2026, held-to-maturity investments was $51 million compared to $50.3 million as of March 31, 2026, and 0 as of June 30, 2025. And as of June 30, 2026, the balance of fixed term deposits within one year was $928.9 million compared to $1 billion as of March 31, 2026, and $960.7 million as of June 30, 2025. Now on the company's cash flows. For the 6 months ended June 30, 2026, net cash used in operating activities was $276 million compared to $105 million in the same period of 2025. And for the 6 months ended June 30, 2026, net cash used in investing activities was $159.6 million compared to $342.7 million in the same period of 2025. Net cash used in investing activities in 2026 was primarily related to the purchase of short-term investments and fixed-term deposits. For the 6 months ended June 30, 2026, net cash used in financing activities was $7.8 million compared to $32,000 in the same period of 2025. Net cash used in financing activities in 2026 was primarily related to $7.8 million in stock repurchases made by the company's subsidiary, Xinjiang Daqo, from its minority shareholders. And that concludes our prepared remarks. We will now open the call to Q&A from the audience. Operator, please begin.

[Operator Instructions] Our first question comes from Philip Shen with ROTH Capital Partners.

This is Oscar Chim on for Phil. Can you hear me okay?

Yes, you're loud and clear.

Okay. I have 2 questions. First question is on government support on poly pricing. Even with the recent 10% rebound in forward prices, poly ASP remained below industry production cost since late Q1. How would you characterize the central government stance on supply rationalization? Are you anticipating any incremental regulatory support that could help establish a sustainable price floor in the near term? And then I have a follow-up.

We will translate your question and then. [Foreign Language] [Interpreted] [Okay. I will translate for our CEO, Mr. Xu.] Okay. On August 6, led by the China's Photovoltaic Industry Association. There is a strong initiative for self discipline. And based on the CPIA cost model, the industry average cost is estimated -- production cost estimate to be around RMB 50,000 per ton, so about RMB 50 per kilogram. But due to the current market environment where demand activity is relatively low, and there's still approximately 500,000 to 600,000 tons of inventory in the industry. So we think this price recovery might take a little bit longer than anticipated, but there is strong consensus within the industry for self-discipline and also with the urging of the government and the related departments that the Industry consensus is that it's no longer viable to sell below cost. And what we're seeing in the market is that the quotations for polysilicon pricing from different manufacturers have already exceeded about RMB 40 per kilogram. So we're optimistic about the current policy development, and we're waiting to see how the policies may be enforced going forward.

[Foreign Language]

Okay. So let me translate for Mr. Xu. [Interpreted] So right now, the industry in terms of the value chain between the buyers and sellers of polysilicon. So some of the buyers are still observing the market and the policy development and they're taking a wait-and-see approach. But in terms of the polysilicon manufacturers, expecting a reasonable price where they would not be selling at a loss or below their cost. So there is still some you can call it a wait and see between the manufacturers and the downstream. But we do believe that the past industry practice of selling below cost, especially in the first 6 months of this year is likely to end and where the government is very adamant about preventing a dumping of the products and selling below cost. So within the law framework for price law and for the anti involution, our expectation is that this is likely to move forward optimistically over the next several months. And then we know that over the past few years, the polysilicon manufacturers or the whole industry in general have seen significant losses, and we do not think that this is long-term sustainable. In fact, it is very unsustainable, and this is likely to lead to the industry in trouble. So if we look at DQ, especially in December of last year when the anti-involution policy was more successful, right? So -- and DQ had no cash loss in Q4 of 2025. So we were able to achieve a positive operating cash flow during that period. So we think that, that's a more sustainable timing of framework going forward.

Just my second question is on the self-discipline agreement signed in August. Previous round of self-regulation kind of struggled to maintain compliance once prices fluctuated. Just wondering what makes this framework structurally distinct from past attempts? And then regarding the energy consumption requirements, what is your estimate of total industry capacity that could be phased out?

Our next question comes from Alan Lau with Jefferies.

We're still answering, translating. Hold on.

All right. We have Philip Shen back on the podium. My apologies.

[Foreign Language]

Now let me translate for Mr. Xu. [Interpreted] Okay. So we believe that the current round of anti-involution policy and with the price law enforcement is likely to sustain. What we saw in the previous round was that there was this proposal for the industry consolidation platform, right, to accelerate the exit of excess capacity. But the state administration for market regulation stepped in because they were very worried about anti-monopoly practices between the manufacturers, the leading manufacturers. So they were worried that this would bring nonmarket activities or behaviors by the main manufacturers. But this time, the current effort is led by the state administration for Market Regulations, and this is bringing some discipline forward. And also, this is not, for example, there's no coordination between the manufacturers on pricing or allocation of sales volume, for example, right? So this time, it's really based on each individual manufacturer's their own cost -- production costs, right, in terms of their manufacturing efficiencies and for them to sell products based on their ability to produce products at a lower cost. Okay, so we think that this time, it's actually much more sustainable and is being supported by the government. So we think that -- so through these 2 efforts, right? So one is by being one of the lowest cost producers within the industry as well as with the regulations on energy usage, we think that this time, it will promote a more market-oriented approach to both capacity exits and to the selling of products at a reasonable price. And this is all under the current legal framework brought forward by the government.

Our next question comes from Alan Lau with Jefferies.

So my first question is a follow-up on the overall initiative to avoid selling below cost. So my understanding is that current inventory in the industry is at quite a high level and the end demand is also quite weak at the same time. So when would you expect the poly price? For example, you mentioned they are price "at above RMB 40 per kilogram." But given that there inventory at the wafer players and demand isn't that strong, when would you expect the first batch of transaction at a higher price to happen? Because in the past 2 weeks, all the data has halted. So I would like to know when we expect the real transaction is coming out.

Okay. So let me translate for Mr. Xu.

Okay.

[Foreign Language]

Let me translate for Mr. Xu. [Interpreted] Okay. I think he's seeing in the market that there is some transactions happening at roughly RMB 40,000 per ton or about RMB 40 per kilogram, although there's a very low volume of transactions right now, even though the overall demand is relatively weak, but there are some wafer producers in the industry that have a very low to no inventory where they are procuring to production. And so right now, so we are seeing some transactions, although not very high. What we're seeing is some manufacturers are testing the market. So although the full cost model would stipulate around RMB 50 per kilogram, some producers are right now testing the market and selling at approximately RMB 40 per kilogram right now. And so it's been about 2 weeks since the announcement of the manufacturers and the guidance from the government. So we do think that going forward, we are likely to see more and more transactions happen at this new price range.

Understood. So strictly based on the production cost, probably polysilicon price will be higher than that. But given that in this round of the anti-involution initiative, there is not an execution plan afterwards. So if prices goes up to RMB 40 -- or maybe RMB 45 or RMB 50 per kilogram, what do you think would happen? Because effectively, this will reach to the cost level of more players. So like who would be able to sell their products? Or what do you think the end game of this round of initiatives? Or is there some capacities will be shut down because of the higher energy consumption requirement? Or like how do you see this...

I will translate for Mr. Xu, just a minute.

[Foreign Language]

Okay. Let me translate for Mr. Xu. [Interpreted] Okay. He thinks that the recent energy quota policy from the government where there's different energy usage requirements. For the industry, he think this will lead to forced exit of a significant amount of capacity that have significant or higher energy usage. So we're likely to see that happen pretty soon. And then also the industry self-discipline and there's a commitment from the various manufacturers that there should be a voluntary reduction of capacity or production. And then also there's a commitment that the manufacturers should not be selling at below production cost. So we think that both of these are likely to happen starting in the second half of this year. And then there's also the issue that not that many producers actually have the capability to produce, especially now that the industry is running at a fairly low utilization level. So a lot of manufacturers have a significant number of people. So there is actually a lack of employees and also lack of training and time. So a lot of capacity that have been shut down is unlikely to restart going forward. So even now, he thinks that, for example, the effective capacity is within the industry, even though close to 3 million tons have been built, the capacity is already less than 2 million tons right now. It's likely to go lower as well.

My last question is about the AIDC initiative on -- as a second growth driver of the company. I wonder if there's -- what the backlog or progress to share on this business?

Okay. Let me translate for Mr. Xu.

[Foreign Language]

[Interpreted] So we do see that the AIDC related power infrastructure and equipment market is actually a very viable sector where it's going to be a significant growth driver for the company, and it's the second sector that the company is entering into. So I think as most investors are probably aware that we do think that the growth for the polysilicon market going forward is likely to be relatively low in terms of volume demand as well as solar. So the company is actively looking for other areas of growth. And because Daqo Group has more than 40 years of experience in the power equipment sector and being one of the leading manufacturers and supplier of high and low voltage for power equipment such as transformers and circuit breakers. So Daqo Group is seeing a very strong demand, especially in AI data center-related power equipment demand. So we do think this is a very significant and real opportunity for the company. And Daqo Group brings many years of experience and advantage in manufacturing and R&D and technology capability. So in terms of products as well. So with the growing power demand and especially for the next-generation power infrastructure for AIDC, where -- led by NVIDIA, the future development of a new -- next generation of equipment under the 800-volt DC infrastructure for -- so we're targeting initially in the solid-state transformer and solid-state circuit breaker market. So the industry is starting in 2027 next year. And then we expect to see very significant growth from 2028 to 2030 with power demand from these new AI data centers based on the new 800-volt DC technology. So with Daqo Group, right, so we bring significant experience and advantage and at the same time, matching with Daqo New Energy's strong balance sheet and capital position, right, to capture this growth driver. So now we have built an R&D team in Shanghai, and we expect to have an initial product ready by year-end and then with prototypes and achieving sales starting in 2027 and then capturing the growth opportunity in 2028 to 2030. And our goal is to become an industry leader within this AIDC power equipment sector by being a Tier 1, both in terms of product and the team. So that's our current goal right now.

Our next question comes from Mengwen Wang with Goldman Sachs.

I have 2 questions. One is related to the poly business and another to the AIDC business. So first, in terms of the poly business, I think you just mentioned like currently, the industry upstream and downstream players is kind of wait and see. And given the downstream inventory is at a relatively higher level, I'm not sure what's the outcome do you expect for -- after the wait-and-see period? And particularly, we had this kind of self discipline in first half, like we uphold our pricing and then we record lower shipments. So I'm wondering like do you have any shipment guidance towards the end of the year? What's our priority going forward? Will we uphold the pricing to the higher level like 50,000 per ton or we are kind of want to reach the balance between price or shipment. So I want to hear more about the poly business operation strategy.

Okay. Thank you, Mengwen. So let me translate your question for Mr. Xu and then he will respond. Okay. Just a minute.

[Foreign Language]

Okay. Let me translate for Mr. Xi. [Interpreted] So in the second half, what we believe is that because Daqo Energy, we have a superior quality of product in the market. So selling and shipping our product is really not an issue. I think the question is really price. So in the first half, because we adhere to self discipline, so we did not sell as much products as our normal market share. So because our competitors were engaged in below-cost sales practices. But if we look at our market share in the past, we believe that we can achieve approximately 15% market share within the industry, and we continue to expect that going forward. So our target is to sell at an appropriate price or a reasonable price and also be fully compliant with the government guidance and the price law. So what we expect is that, say, in the next 6 to 18 months, we're likely to see a forced exit or market-based exit of manufacturers with high production costs or manufacturers with poor cash positions or poor cash flow. So companies with not a good balance sheet is likely to struggle -- continue to struggle going forward, while Daqo New Energy with our cash position and our strong balance sheet and also our high product quality and low cost, we expect that we're likely to do better and to do well in the market. So especially in 2027, where we expect to see a much improved and better market environment. And then we expect to continue to lower our inventory going forward to a relatively low inventory levels. That's our target.

Okay. So can I conclude that we will hold up the pricing in near term, and we will wait the rest of the marginal players to exit and then we -- that's the time we will see fast inventory depletion and recovery of the shipment is likely to occur in the next 6 to 18 months.

I think in terms of pricing, right, so I mean, we cannot sell below cost, right? So we're going to adhere to that. And then at the same time, we'll look for opportunities to sell at a reasonable price. And yes, and then wait and then for the market to have additional capacity exits, yes.

Okay. That's super clear. And my second question about AIDC. I think we have put out an announcement like we have RMB 6 billion total investment, RMB 2 billion in the first phase. And you just mentioned we will have sales volume reported in next year. So just wondering, can you share a bit more about the plan for the AIDC business, specifically like our CapEx time line and the source of capital for this RMB 6 billion or RMB 2 billion investment? And what's our expected payback duration for the first phase of the production base? And what the normalized profitability from this business do we expect we will achieve and also for other like operating metrics, will we have more other sources allocated for this new business development or we can use some of the synergies from our Daqo Group aligned company. So a lot of details, but can you share a bit more regarding to the metrics?

Okay. Let me transfer your question first quickly. Hold on.

[Foreign Language]

[Interpreted] Okay. Let me translate for Mr. Xi. Okay. I think first of all, let me just clarify on the investments involved. So even though the total project anticipated investment is RMB 6 billion, we're only committing the first phase right now, which is about RMB 2 billion, which will cover all of solid-state transformer, solid-state circuit breaker and also our e-house total solution for AI power infrastructure and also some related to energy storage. And so the remaining RMB 4 billion is not committed as of today. So -- and it will be planned sometime in the future. And then in terms of our strategy, so we're focusing on AIDC-related power infrastructure equipment. And then we expect to have 3 primary products, right? So one is a total solution or a package solution for -- which is going to be a plug-and-play, kind of solution for AI power infrastructure, which has all the related power equipment and then also on solid-state transformers and solid-state circuit breakers and include the related software and control. And there is very significant synergy with Daqo Group, where we -- because of Daqo Group's experience and know-how and also their position within the market, we think that is actually we can receive significant orders from customers. And so we're now in the phase of doing R&D and also the building of related manufacturing facilities and the R&D team is now in place, and we continue to expect to have our prototype ready by year-end and getting these products. So in terms of 2026, and 2027 is really a preparation period and introduction of the product into the market. And we think that the market will see a high growth phase from 2028 to 2030 and where we do expect a significant ramp-up of revenue during this period for these related products and business.

Just very small question. For the 2 billion committed investment, we will spend in 2026?

Over the next 2 years, this year is only about I think it's only maybe USD 30 million to USD 40 million this year. And then the remaining will be over the next 2 years actually.

That's all from me, thank you.

And then our CEO will make additional comment.

[Foreign Language]

Okay. And Mr. Xu will provide an update on our semiconductor polysilicon business, where the company has spent a total investment, including land and related equipment facilities of about RMB 1.2 billion into the business. And we've been doing product trial production and also in terms of qualification with our customers. And the qualification cycle has been much longer than we anticipated, but we're continuing to do this. And he's very optimistic that he's looking at very significant market demand, where the demand for semiconductor poly is roughly 75,000 tons per year. While right now, the current industry production for semiconductor poly is only about 57,000 tons per year. So he's anticipating a very significant growth for this product, this market sector. So we're going to ramp up and reinvigorate our activities for this.

This concludes our question-and-answer session. I would like to turn the conference back over to Jessie Zhao for any closing remarks.

Thank you, everyone, again for participating in today's conference call. Should you have any further questions, please don't hesitate to contact us. Thank you, and have an awesome day. Goodbye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.