TCL Zhonghuan

Business

TCL Zhonghuan (TCL中环新能源科技股份有限公司), controlled by TCL Technology Group, makes solar wafers, solar cells and modules, builds solar plants, and makes semiconductor wafers through its subsidiary Zhonghuan Advanced (2026 interim report, pp. 5, 12, 13, 16). It sells modules under the TCL Solar and SunPower brands (p. 15).

Results in the first half of 2026

• Revenue rose 6.84% to ¥14.31bn, and the net loss attributable to shareholders narrowed by 24.5% to ¥3.20bn: ¥1.65bn in the first quarter and ¥1.56bn in the second (p. 11).
• Solar wafers brought in ¥5.05bn, down 12.62%, at a gross margin of -35.54%, down 11.80 points (p. 16).
• Modules brought in ¥5.32bn, up 38.29%, at a gross margin of -1.05%, up 5.15 points (p. 16).
• Semiconductor materials brought in ¥3.02bn, up 10.16%, at 14.30%, and solar plants ¥452m (p. 16).
• Exports rose 146.35% to 24.58% of revenue, from 10.66% a year earlier (p. 16).
• Asset impairments, including inventory write-downs, were ¥975m (p. 17).

Wafers

It shipped 53.9 GW of wafers in the half and says it has the largest market share (p. 12). It launched wafers tailored to TOPCon, back-contact (BC) and heterojunction (HJT) cells, and its overseas wafer shipments rose 3.7 times, with new customers in India and Turkey (p. 12). Monthly output per crystal-growing machine rose 11.8% and slicing machine output 5.9% (p. 11).

Moving into cells and modules

The company calls its strategy "moderate integration". Module shipments rose 29%, and in the second quarter module revenue exceeded revenue from solar materials (pp. 11, 12). Its acquisition of a controlling stake in Yidao New Energy closed in early July, taking its capacity to 20 GW of cells and 50 GW of modules. It is converting all of that cell capacity and half of the module capacity to BC, with the lines ramping up from the end of the third quarter (pp. 12, 13). It is also discussing joint ventures abroad to make BC modules locally (p. 12).

Our view: the wafer losses explain the move. A wafer maker selling at a 35% gross loss has little to lose by competing with its customers, and modules, at close to break-even, already lose far less per yuan of revenue.

Semiconductor wafers

Zhonghuan Advanced, a subsidiary in which the company holds 32.72%, shipped 689 million square inches of chip wafers, up 17%, of which 57.8% were 12-inch. It had revenue of ¥3.04bn and a net loss of ¥86m, and plans to raise 12-inch capacity to 2.1 million wafers a month (p. 13).

The company's own caveats

• Trade. Tariffs, subsidies and supply-chain tracing rules abroad keep changing (p. 23).
• Oversupply. It warns that oversupply, low-price competition and pressure on profits may continue (p. 23).
• Acquisitions. The benefits of the Yidao deal are uncertain. Maxeon Solar Technologies, in which it invested, has entered judicial management and is no longer consolidated; the company says it made sufficient impairment provisions in earlier years, but the proceedings and their effects remain uncertain (pp. 23, 24).