OTSM's new polysilicon plant in Sarawak to set global standards

Borneo Post

14-07-2025

Choi says Sarawak was chosen for the investment because of its strategic location, political stability and focus on renewable energy.
KUCHING (July 12, 2025): Sarawak is set to make Malaysia the fifth country in the world to produce semiconductor-grade polysilicon with the launch of a new plant under OCI Tokuyama Semiconductor Materials Sdn Bhd (OTSM).
The RM2 billion facility is a 50:50 joint venture between Japan's Tokuyama Corporation and South Korea's OCI TerraSus.
It will be built on a 13.7-hectare site at Samalaju Industrial Park in Bintulu, next to OCI TerraSus' existing solar-grade polysilicon plant.
OTSM chief executive officer Steve Choi said the new plant will position Malaysia alongside the US, Germany, China and Taiwan in producing this high-purity material.
'This is quite a meaningful investment. With this investment, we will create about 200 high-quality jobs and upskilling opportunities for Sarawakians,' he told The Borneo Post.
According to Choi, the plant will have an annual production capacity of 8,000 metric tonnes of semiconductor-grade polysilicon and is expected to be mechanically completed by the first quarter of 2027.
Full commercial operations are targeted to begin in January 2029, he said.
'From the beginning of 2029, we are targeting January for full production. The products will be distributed to Japan, Korea and Taiwan,' he said.
He also revealed that a groundbreaking ceremony for OTSM is scheduled to be held on July 16 attended by representatives from the Sarawak government.
For information, the difference between solar-grade and semiconductor-grade polysilicon lies in its level of purity.
Solar-grade polysilicon typically reaches a purity level of 99.999999 per cent, commonly referred to as 9N (nine nines). It is the key material used in the production of solar cells, which are the fundamental components of solar panels.
On the other hand, semiconductor-grade polysilicon must reach 11N purity, or 99.999999999 per cent. It is primarily used to manufacture silicon wafers, which are the foundational material for integrated circuits (ICs) and other microelectronic components found in a wide range of electronic devices such as computers and smartphones.
'This level of purity is much harder to achieve. Each additional nine in the purity level means the material is ten times more refined. So to go from 9N to 11N, the purification process becomes significantly more demanding,' Choi explained.
On global demand for semiconductor-grade polysilicon, Choi noted that it currently stands at only 50,000 metric tonnes annually.
This means OTSM's output will account for close to one-sixth of global supply, making it a key player in the semiconductor industry.
Spotlight for Sarawak
Photo shows OCI TerraSus' existing production plant. The new plant will have an annual production capacity of 8,000 metric tonnes of semiconductor-grade polysilicon and is expected to be mechanically completed by the first quarter of 2027, while full commercial operations are targeted to begin in January 2029.
Choi said Sarawak was chosen for the investment because of its strategic location, political stability and focus on renewable energy.
'Since we (OCI Holdings) acquired Tokuyama Malaysia in 2017, we have experienced Sarawak to be politically stable. The state also uses a large share of green energy, such as hydro-generated power,' he said.
He said the joint venture brings high-end capabilities and credibility from both Japan and South Korea, helping Sarawak grow its industrial platform and technology base.
Furthermore, Sarawak's position in Southeast Asia offers proximity to major tech markets such as Korea, Japan and Taiwan.
He said this is important as the world moves away from reliance on China in the semiconductor value chain.
'This is meaningful at a time of US-China decoupling. We can diversify and strengthen Southeast Asia's position in the high-purity polysilicon sector,' he said.
In line with its commitment to develop local talent, he said about 90 per cent of the company's workforce is Sarawakian. It is also collaborating with universities and vocational colleges to secure young talents and develop their skills.
'We trained them and gave them exposure to the complex chemical manufacturing industry. Through this joint venture, we will deliver even higher standards of skills to the 200 new employees we plan to hire,' he said.
OTSM's operations will also contribute to climate goals, as its products support clean energy technologies and digital innovation.
Choi said the venture is powered by 70 per cent renewable hydropower through a 10-year Power Purchase Agreement (PPA) with Sarawak Energy Berhad (SEB).
'This ensures a stable and sustainable power supply from the state. This is on top of Sarawak's already competitive energy pricing,' he said.
Not much global competition yet
When asked whether China poses a strong threat in this market, Choi said Chinese companies are trying to break into the semiconductor-grade segment but have yet to succeed.
'Currently, China's polysilicon companies are trying to move into the semiconductor-grade space. But so far, they haven't been successful.
'In the global market, particularly in the US, they are trying to differentiate Chinese and non-Chinese sources. This is where OTSM holds a strategic advantage,' he said.
Choi said Malaysia especially Sarawak stands to benefit from this shift and it poses a great opportunity for Sarawak to attract investment, as companies look to relocate away from China.
He noted that while Southeast Asia has seen the emergence of many solar value chain companies, the US has imposed anti-dumping and countervailing duties on some products from the region, including Malaysia.
He stressed that OTSM is not affected by these issues.
'We are a 50-50 joint venture between Korea and Japan. We have no Chinese ownership. Therefore. we are largely insulated from such future issues,' he said.
Choi added that many investors are now looking to Southeast Asia for new projects due to the difficulty of accessing the US market from China.
'Malaysia, and especially Sarawak, is in a strong position to take advantage of this realignment,' he said.