Daqo New Energy Announces Unaudited Third Quarter 2026 Financial Results

Xiang Xu, CEO of Daqo New Energy

“Supported by continued anti-involution policies, including price enforcement, the polysilicon sector bottomed out and rebounded in Q3, with polysilicon prices gradually recovering towards cost levels. However, downstream players continued to hold polysilicon inventories and largely limited their purchases to immediate operational needs, keeping overall sector trading volumes low. Against this backdrop, we delivered a substantial increase in Q3 shipment volumes, driving strong sequential revenue growth and narrowing losses. Our financial position remained sound, with a robust balance sheet and zero debt throughout the period. As of September 30, 2026, we held cash, cash equivalents and restricted cash of $546.5 million, short-term investments of $267.3 million, bank notes receivable of $161.5 million, held-to-maturity investments of $51.6 million, and a fixed term bank deposit balance of $1.0 billion. Together, these readily convertible assets totaled $2.06 billion, up from $1.92 billion at the end of Q2, providing a strong financial foundation and strategic flexibility to navigate the current market environment.”

Xiang Xu, CEO of Daqo New Energy

“Operationally, our nameplate capacity utilization rate was approximately 70% during the period. Total production volume at our two polysilicon facilities was 53,469 MT, exceeding our guidance range of 40,000 MT to 45,000 MT. Sales volume rose sharply from 15,190 MT in Q2 to 46,910 MT in Q3, following our shift in June from a wait-and-see stance to a more market-oriented sales and pricing strategy. We believe this increase also reflects greater customer confidence in our product quality and continued preference for our products. Our average selling price increased by 2.0% sequentially to $4.12/kg, although the increase lagged the broader market recovery because Q3 shipments fulfilled orders signed before late July. On the cost side, average total production cost and average cash cost fell by 9.7% and 7.4% sequentially, respectively, reaching new record lows of $5.37/kg and $4.23/kg, respectively, reflecting our continued improvements in manufacturing efficiency and cost control.”

Xiang Xu, CEO of Daqo New Energy

“In light of the current market dynamics, we expect total polysilicon production volume in Q4 2026 to be approximately 35,000 MT to 45,000 MT. For the full year of 2026, we expect production volume to be in the range of 175,000 MT to 185,000 MT.”

Xiang Xu, CEO of Daqo New Energy

“Anti-involution efforts across the solar PV sector continued during Q3. The State Administration for Market Regulation (SAMR) released price compliance guidance targeting the solar PV sector on July 31, followed in August by an industry initiative against below-cost sales that we co-signed. Against this backdrop, polysilicon manufacturers halted below-cost sales, and N-type polysilicon prices rebounded from a trough of RMB 30.5-33/kg in Q2 to approximately RMB 40-43/kg by the end of Q3. On September 3, the National Development and Reform Commission (NDRC) and the SAMR jointly issued the Notice on Matters Concerning Cost Accounting for Low-Price Disordered Competition in Key Industrial Products, establishing a firmer regulatory basis for polysilicon pricing. Despite these policy tailwinds, elevated industry inventories and weak near-term demand continue to make the operating environment challenging. In response, we are taking a disciplined approach and evaluating a reduction in our near-term utilization rate to better align our production with market demand and support the orderly destocking of polysilicon inventories. This approach is consistent with our commitment to the long-term, healthy development of the solar industry.”

Xiang Xu, CEO of Daqo New Energy

“We are also diversifying beyond our core polysilicon business to reduce our exposure to solar PV cyclicality by targeting the fast-growing AI data center (AIDC) power infrastructure market. On June 3, 2026, we announced an investment agreement to establish a manufacturing base for the R&D, manufacturing, and sale of next-generation energy solutions and related equipment for AIDCs, including energy storage systems, solid-state transformers, and solid-state circuit breakers. These technologies support the AIDC 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, an affiliated entity under common beneficial ownership with Daqo New Energy Corp., which brings over 40 years of power equipment manufacturing expertise, established technology, experienced talent, and deep customer relationships to help accelerate our entry into this segment. We view AIDC power infrastructure as a structural growth opportunity that complements our core business and has the potential to broaden our earnings base. Drawing on our track record of navigating multiple polysilicon cycles, we intend to pursue this expansion in a disciplined manner while preserving our balance sheet strength.”

Xiang Xu, CEO of Daqo New Energy

“Despite the challenging market environment, the solar PV industry retains compelling long-term growth prospects. Growing vulnerabilities in global energy markets have heightened concerns about national energy security, underscoring the important role that solar PV and other renewable energy sources can play. As one of the world's lowest-cost producers of high-quality N-type polysilicon, supported by a robust balance sheet and zero debt, we remain optimistic about the sector and are well positioned to capitalize on the anticipated broader market recovery and long-term growth opportunities. We will continue to sharpen our competitive edge by advancing high-efficiency N-type technology and using digital transformation and AI adoption to optimize costs. As the world accelerates its transition to clean energy, we are confident in our ability to play a leading role in that transition.”