The anti-dumping and anti-subsidy probe taken up by the US government has been causing concerns for China-based solar firms. China-based polysilicon firms have suggested the Chinese government apply anti-dumping tariffs on US- and South Korea-based polysilicon firms to help maintain competitiveness.

If the tariffs are levied onto US- and South Korea-based polysilicon firms, this means China-based downstream solar firms who have long-term supply contracts with international suppliers will suffer from increasing material costs.

Korea-based polysilicon supplier OCI has been quoting the materials at the same price levels for both Taiwan-based solar firms as their China-based peers. If the price for China-based firms increases, Taiwan-based firms may face similar increase in prices.

According to industry sources, many China-based polysilicon firms have been forced to shut down production due to increased supply of polysilicon to China's domestic market from South Korea-based firms. This has been especially apparent in the second half of 2011.