Daqo New Energy makes and sells high-purity polysilicon to solar PV manufacturers in China. Polysilicon is the primary raw material for solar cells, and Daqo sits at the upstream end of the solar supply chain — customers buy polysilicon from Daqo, then process it into ingots, wafers, cells, and modules. Daqo is a single-product business; it exited wafers in 2018 and modules in 2012 to focus entirely on polysilicon. The company operates two production bases in Xinjiang and Inner Mongolia, with a combined nameplate capacity of 305,000 MT of solar-grade polysilicon, plus a small semiconductor-grade facility. Revenue is simply volume sold multiplied by the prevailing market price, making profitability highly sensitive to polysilicon spot prices and utilization rates. Daqo deliberately locates facilities in Xinjiang and Inner Mongolia to access lower electricity rates — electricity is the largest production cost driver — which Daqo argues gives it a structural cost advantage over both international and Chinese coastal competitors. The company's customer base is concentrated, with the top three customers accounting for roughly 60%+ of revenue. The dominant issue facing Daqo is severe industry overcapacity, with Chinese nameplate capacity far exceeding annual demand, which pushed polysilicon prices below cash cost for much of 2024 and 2025. The Chinese government has responded with "anti-involution" policies, including price floors and energy efficiency standards, aimed at forcing capacity rationalization. Daqo carries no bank debt and held approximately $2.27B in liquid assets as of end-2025, positioning it as one of the more financially resilient producers through the downturn.