OCI Holdings Co., South Korea’s leading chemical and green energy company, plans to invest up to 2 trillion won ($1.5 billion) in Malaysia to increase the manufacturing capacity of the polysilicon for solar panels and expand its product portfolios into the polycrystalline silicon for semiconductors.

OCI said it agreed with the Malaysian government on Monday to spend 850 billion won by 2027 to raise the capacity of polysilicon for solar panels of OCIM Sdn. Bhd., its wholly-owned subsidiary in the Southeast Asian country, to 56,000 tons a year from the current 35,000 tons.

The South Korean company also said it aims to manufacture polysilicon for semiconductors there through partnerships with global companies, which is likely to boost the investments to 2 trillion won.

“We are enjoying continuous orders from global companies, which seek low-carbon products, as we operate the factory with hydroelectric power,” said OCI Chairman Lee Woo-hyun at the KL20 Summit 2024, the Malaysian government-organized event to attract investment in Kuala Lumpur.

“We aim to expand business areas through cooperation with not only the government but also global companies.”

BENEFITS FROM US SANCTIONS ON CHINESE POLYSILICON

OCIM has been a major beneficiary of the US sanctions on Chinese polysilicon. Washington effectively banned the imports of solar modules made of raised silicon material from Chia under the Uyghur Forced Labor Prevention Act (UFLPA) in July last year.

OCIM also took advantage of Malaysia’s incentives to attract foreign investments.

The government exempts corporate taxes for foreign companies building new factories in the country for 10 years and extends the benefit if they invest in adding capacities. Electricity is supplied at less than half the prices in South Korea through long-term contracts.

Thanks to the policy, OCIM logged an operating profit of 531 billion won last year despite fierce competition against Chinese rivals, which provided low-cost products.