The price of solar wafers has drifted to US$1.20/unit as firms try to clear out inventories. This price is close to the cost of Taiwan-based solar wafer makers, according to industry sources.

China-based firms have competitive advantages in production costs because they have effective control over polysilicon. Other materials are also cheaper to obtain for China-based solar firms compared with Taiwan-based peers. Excluding polysilicon costs, the average cost of a 6-inch polysilicon solar wafer from China-based firms is under US$1.

The price of solar wafers has been sliding since the second quarter, causing firms to start reporting losses. Prices of polysilicon and solar wafers have been sliding continuously in the fourth quarter. Firms have been selective in choosing orders and lowering utilization rates to maintain cash on hand.