3-Year Loss Exceeds 22 Billion! TCL Zhonghuan Makes a Billion-Dollar 'Gamble' on Semiconductors Against the Trend

The difficulties in the photovoltaic (PV) industry have yet to show significant improvement.

According to official data, domestic new PV installations from January to May this year reached 59.59 GW, a sharp year-on-year decline of 69.9%; meanwhile, the industry's bidding scale was only 25.9 GW, down nearly 70% year-on-year.

The substantial drop in installation volume has directly dragged down prices across the entire PV supply chain. Over the past two years, polysilicon prices have plummeted from historical highs to 31 RMB/kg, breaking through the cash cost threshold for the vast majority of companies in the industry. Today, the entire PV sector is mired in overcapacity, with widespread losses becoming the norm. The combined losses of nine leading enterprises in 2025 hit a record high.

Against the backdrop of the entire industry contracting to survive and struggling through this trough, silicon wafer giant TCL Zhonghuan has instead embarked on large-scale expansion against the trend.

On July 17, 2026, TCL Zhonghuan announced an investment of 11.96 billion RMB to build a 12-inch semiconductor large silicon wafer project in Shenzhen, with a planned monthly capacity of 700,000 wafers. Notably, just one week prior, the company had unveiled a 2.6 billion RMB technical transformation plan for its BC technology production lines.

In just one month, these two major investments totaled over 14.5 billion RMB. Such massive expansion moves are extremely rare in the current sluggish PV industry.

However, behind this aggressive expansion, TCL Zhonghuan's financial situation has long been flashing red lights.

According to the company's performance forecast, TCL Zhonghuan is expected to incur losses of 3 to 3.3 billion RMB in the first half of 2026.

Prior to this, the company had already been 深陷 in huge losses for two consecutive years, with a net loss of 9.818 billion RMB in 2024 and another 9.264 billion RMB in 2025, totaling 19 billion RMB. Adding the H1 2026 losses, the company's cumulative losses over less than three years will exceed 22 billion RMB.

The Rise and Fall of PV Giant TCL Zhonghuan

TCL Zhonghuan traces its origins to the Tianjin Semiconductor Materials Factory, established in 1958, which was among the earliest semiconductor enterprises in New China.

However, what truly allowed TCL Zhonghuan to secure its position as an industry leader and enter the public eye was not its semiconductor business, but rather its PV silicon wafers.

In the 1980s, Shen Haoping joined Central Group (Zhonghuan Shares), setting a new development direction for the enterprise—the PV silicon wafer track.

Under Shen Haoping's leadership, Central Group achieved global mass production of 210mm large-size silicon wafers, establishing a technological leadership advantage in the monocrystalline silicon wafer field. In 2020, TCL Group invested 12.5 billion RMB to take control of Central Group, officially renaming it TCL Zhonghuan. This state-owned enterprise integrated the expansion DNA of private capital, embarking on a high-speed development model.

After TCL Group's takeover, TCL Zhonghuan's capacity exploded. PV silicon wafer capacity expanded rapidly from tens of GW to 190 GW, capturing an 18.9% global market share and solidifying its position as the global silicon wafer leader. During the industry peak in 2022, TCL Zhonghuan reported an annual net profit of 6.819 billion RMB, making it one of the most profitable companies in the PV supply chain at the time.

As capacity expanded rapidly, the company's stock price rose in tandem. In July 2022, the stock price peaked at 49.43 RMB/share, with a total market capitalization nearing 200 billion RMB. At that time, TCL Zhonghuan was considered the ceiling of the silicon wafer track.

But these highlight moments were short-lived. As the PV industry fell into a crisis of comprehensive overcapacity, TCL Zhonghuan quickly fell from grace.

Starting in the second half of 2023, the overcapacity issue across the entire PV supply chain erupted. Currently, domestic polysilicon commissioned capacity exceeds 3 million tons, while global actual demand in 2026 is only slightly over 1 million tons, leaving nearly two-thirds of industry capacity in an oversupplied state. Polysilicon prices crashed from historical highs to 31 RMB/kg, completely breaking through the cash cost line for the entire industry.

Silicon wafers, located in the midstream of the supply chain, face an especially awkward situation: upstream polysilicon prices continue to fall, while downstream module manufacturers also suffer from severe overcapacity and involution. Under this double squeeze, silicon wafer selling prices have remained below production costs for a long time, completely compressing corporate profit margins.

The downturn in performance intuitively reflects the company's operational difficulties. In 2024, TCL Zhonghuan's attributable net loss was 9.818 billion RMB, and in 2025, it lost another 9.264 billion RMB, totaling 19 billion RMB in losses over two years. Entering 2026, the company's operational pressure remains unchanged, with a pre-loss of 3 to 3.3 billion RMB in the first half. The operating profits accumulated over many years since listing have been almost entirely consumed within this short three-year industry downturn cycle.

In 2025, founder Shen Haoping stepped down, and Ouyang Hongping took over as CEO, completing a major overhaul of TCL Zhonghuan's core management team. Facing the new management was a silicon wafer empire boasting 190 GW of capacity but 深陷 in continuous massive losses.

By conventional industry logic, when a company is in a deep downturn cycle, the optimal choice must be to contract capacity, cut expenses, reduce costs to survive, and wait quietly for the industry cycle to reverse. But contrary to all market expectations, TCL Zhonghuan did not contract to avoid risk; instead, it increased investment and expanded comprehensively against the trend, initiating an extreme industry gamble.

Deep Schemes Behind Counter-Trend Expansion

In this counter-trend layout, TCL Zhonghuan aims to break out from three main directions, comprehensively restructuring its business structure.

First, vertically extending the industrial chain by entering the battery and module tracks.

In early July 2026, TCL Zhonghuan completed the acquisition of controlling stakes in Yidao New Energy, securing 20 GW of battery capacity and 50 GW of module capacity. For TCL Zhonghuan, whose main business is silicon wafers, this move directly 补齐 es the two downstream links of batteries and modules, achieving vertical extension of the industrial chain.

The core logic of this acquisition is clear: currently, external sales of silicon wafers continue to lose money, but relying on internal digestion through own-module capacity can reshape the profit model. From performance data, in Q2 2026, TCL Zhonghuan's module business revenue proportion exceeded 50% for the first time, and overseas module shipments surged 4 times year-on-year. This shows that the internal capacity digestion capability brought by the integrated layout has begun to offset the loss pressure of the main silicon wafer business, becoming a new operational pivot for the company.

Second, betting on next-generation PV technology and fully switching to the BC track.

Also in early July, TCL Zhonghuan announced a major 2.6 billion RMB technical transformation plan, comprehensively switching the combined 20 GW battery capacity and 25 GW module capacity across its six bases from TOPCon technology to BC technology.

BC technology is currently recognized as the next generation of efficient mainstream technology in the PV industry, with a significantly higher upper limit for photoelectric conversion efficiency than TOPCon. It is also the core direction focused on by leading enterprises such as LONGi Green Energy.

Under the pressure of continuous losses, TCL Zhonghuan still invests heavily in technical transformation. The core reason is that the TOPCon track has already become thoroughly involutionary. After two years of 疯狂 expansion, TOPCon capacity is severely oversupplied, and price wars have completely compressed industry profit margins, leaving companies with almost no profit. Sticking to old technologies will only lead to continuous low-price involution.

In contrast, BC technology currently suffers from scarce mass production capacity and significant product premiums. Meanwhile, the new national standard for the PV industry in 2027 is about to land, and a large number of inefficient and outdated capacities will be cleared out in batches. Switching to BC technology in advance is both a way to 摆脱 homogeneous involution and to obtain tickets for the next round of industry competition in advance.

Third, cross-border transformation and vigorous layout of semiconductor large silicon wafers.

On July 17, 2026, the company announced a 11.96 billion RMB project for 12-inch semiconductor large silicon wafers in Shenzhen, with a planned monthly capacity of 700,000 pieces. Adding existing capacities in Tianjin, Yixing, and Guangzhou, TCL Zhonghuan has completed the national layout of semiconductor silicon wafer capacity.

This is the key layout for the company to break free from dependence on the PV cycle. Currently, the global AI computing power industry is booming, driving continuous shortages in demand for upstream chip raw materials. As the core substrate for chip manufacturing, the global supply-demand gap for 12-inch large silicon wafers continues to widen. The current global monthly demand is about 8.5 million pieces, while supply is only 7.7 million pieces. The domestic self-sufficiency rate is only 20% to 30%, with clear domestic substitution space and strong certainty.

Benefiting from high industry prosperity, TCL Zhonghuan's semiconductor silicon wafer business performed brightly, with H1 2026 revenue exceeding 3 billion RMB, shipment volume growing 17% year-on-year, and gross margin remaining stable. Against the backdrop of continuous massive losses in the main PV business, the semiconductor business has become the company's only stable and profitable core segment.

With three-way layouts and multi-billion counter-trend expansion, TCL Zhonghuan's intention is very clear: no longer passively trapped in the PV involution quagmire, actively breaking the deadlock and transforming to find a new growth curve.

Life and Death Speed, Risks and Opportunities Coexist

From the current situation, sticking to traditional PV business will only result in continuous losses, but this multi-billion counter-trend gamble also hides huge risks. TCL Zhonghuan has entered a life-and-death sprint phase.

First, continuous massive losses 叠加 with high debt mean the company's funding pressure is approaching the limit.

As of the end of 2025, TCL Zhonghuan's total liabilities reached 78.738 billion RMB, with a asset-liability ratio of 66.73%, rising for two consecutive years. In the debt structure, short-term borrowings were only 130 million RMB, but long-term borrowings were as high as 42.356 billion RMB, and non-current liabilities due within one year were 11.364 billion RMB. Meanwhile, the company's book monetary funds were only 11.889 billion RMB, creating huge short-term debt repayment pressure.

At the same time, the company suffered massive losses in 2024 and 2025, having not distributed dividends to shareholders for two years, causing equity refinancing channels to continuously narrow. For this multi-billion semiconductor project, the proportion of own funds does not exceed 40%, with the remaining 60% relying on bank loans and equity financing. Under the fundamental condition of continuous losses, there is great uncertainty in bank credit and capital market financing space.

Second, facing strong enemies in three new tracks, the company is always in a catching-up position throughout.

In the PV module field, four giants—LONGi Green Energy, JinkoSolar, Trina Solar, and JA Solar—maintain top positions in shipment volume. Although TCL Zhonghuan quickly 补齐 ed capacity through acquisition to enter the module track, it does not hold advantages in market share, channels, or brand, making breakthrough extremely difficult.

More critically, business transformation brings the risk of backlash from core customers. Previously, TCL Zhonghuan was a core silicon wafer supplier for various module giants, maintaining a stable cooperative relationship. Now that it is entering the module business itself, former partners have directly become industry competitors. Long-term order stability and customer relationships will face severe tests.

In the BC technology track, LONGi Green Energy is the absolute industry leader, with technological reserves, mass production yield, and cost control far ahead. TCL Zhonghuan is currently still in the stage of technological catching-up. Large-scale production line transformation, yield ramp-up, and cost optimization all require time, and the payback period exists with great uncertainty.

The semiconductor silicon wafer track is even more crowded with strong players. The global market has long been monopolized by overseas giants such as Shin-Etsu, SUMCO, and Siltronic from Japan and Germany, with the industry CR5 market share exceeding 85%. Domestic local enterprises like NSIG and Leon Micro have also cultivated deeply for many years. TCL Zhonghuan entered the game later, making breakthroughs extremely difficult.

But for the current TCL Zhonghuan, there is no way out. The intensely involutionary PV industry is continuously shrinking the survival space for traditional silicon wafer enterprises. Counter-trend transformation and multi-road breakthroughs are the only remaining path for the enterprise to break the deadlock.

Conclusion

From the peak of 10 billion RMB profit and nearly 200 billion RMB market capitalization in 2022, to three years of massive losses of 22 billion RMB and debts approaching 80 billion RMB, TCL Zhonghuan completed the full bull-bear cycle of the PV industry in just a few short years, experiencing dramatic ups and downs.

Continuous massive losses have almost exhausted the family fortune accumulated by the enterprise over many years. Now, advancing on three fronts and gambling billions is a desperate struggle under 绝境， and also TCL Zhonghuan's last opportunity to break out.

However, whether it is PV integration transformation, BC technology lane-changing, or domestic substitution of semiconductor silicon wafers, none can achieve short-term profitability. All require long-term technological accumulation, capacity polishing, and market verification.

Currently, the time window left for TCL Zhonghuan is continuously shrinking: book funds cannot support huge investments for long, industry rivals will not stop expanding, and the patience of the capital market and investors is also being continuously consumed. In this counter-trend gamble, TCL Zhonghuan clearly has no way out.