Hello, everyone. I'm Jessie Zhao, the Investor Relations Director of Daqo New Energy.

Thank you for joining our conference call today. Daqo New Energy just issued its financial results for the second quarter of 2026, which can be found on our website at www.dqsolar.com.

Today attending the conference call we have our chairman and CEO Mr. Xiang Xu, our deputy CEO Ms.

Anita Zhu, our CFO Mr. Ming Yang, and myself.

Today's call will begin with an update from Mr. Xu on market conditions and company operations, followed by a translation from Ms.

Xu and then Mr. Yang will discuss the company's financial performance for the quarter.

After that, we will open the floor to Q&A from the audience. Before we begin the formal remarks, I would like to remind you that certain statements on today's call, including expected future operational and financial performance and industry growth, are forward-looking statements that are made under the Safe Harbor provisions of the U.S.

Private Securities Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties.

A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding these and other risks is included in the reports or documents we have filed with or furnished to the Securities and Exchange Commission.

These statements only reflect our current and preliminary review as of today and may be subject to change. Our ability to achieve these projections is subject to risks and uncertainties.

All information provided in today's call is as of today, and we undertake no duty to update such information, except as required under applicable law. Also during the call, we will occasionally reference monetary amounts in U.S.

dollar terms. Please keep in mind that our functional currency is the Chinese RMB.

We will offer these translations into U.S. dollars solely for the convenience of the audience.

Now I will turn the call to our chairman and CEO Mr. Xiang Xu.

Mr. Xu, please go ahead.

亲爱的听众,大家晚上好,我是徐翔，大觉新能源的

CEO。感谢大家出席大觉新能源2026年二季度的业绩交流会。因为时间的关系，我就想请 Anita 把我今天的这个报告的内容翻译一下，直接讲用时间的关系。

Hello everyone, this is Anita, and I'll now translate for Chairman Mr. Xu.

In the second quarter of 2026, market sentiment across the solar PV industry remained cautious amid weak domestic demand and elevated unemployment levels, which drove prices lower across the solar value chain. Despite these headwinds, we resumed sales in June, delivering a sequential increase in revenue and a narrowing of quarterly operating and net losses.

Throughout this period, we continued to maintain a robust and healthy balance sheet with zero debt. As of June 30, 2026, we held a cash balance of 565.3 million, short-term investments of 250 million, bank deposits being both of 71.7 million, held-to-maturity investments of 51 million, and fixed-term deposits of 994.8 million.

Together, these readily convertible assets totaled 1.9 billion U.S. dollars, providing us with ample liquidity, confidence, and strategic flexibility to navigate the current market downturn.

On the operational front, we continued to take proactive measures to navigate challenging market conditions, with our nameplate capacity utilization rate operating at approximately 57% during the period. Total production volume at our two polysilicon facilities was 43,675 metric tons for the quarter, exceeding our guidance range of 35,000 metric tons to 40,000 metric tons, with polysilicon market prices remaining below production costs since the first quarter of 2026.

We initially refrained from engaging in below-cost sales in line with China's self-regulation guidelines and adopted a disciplined wait-and-see approach pending further implementation of the national anti-dumping policies. However, after an extended period without clear policy updates, we adjusted our sales and pricing strategies toward a more market-oriented approach in June.

As a result, our sales volume increased from 4,482 metric tons last quarter to 15,190 metric tons, with average selling price falling to 4.04 U.S. dollars per kilogram.

Our polysilicon transactions and shipment volumes have continued to pick up in the third quarter, reflecting increased confidence in the quarterly and an ongoing preference for product from customers. On the cost side, solar production costs remained flat sequentially at 5.95 U.S.

dollars per kilogram, with cash costs edging down by 0.4% to 4.57 U.S. dollars per kilogram, and manufacturing costs, R&D terms, declining slightly.

In light of the current market dynamics, we expect total polysilicon production volume third quarter 2026 to be approximately 40,000 metric tons to 45,000 metric tons. For the full year 2026, we expect production volume to be in the range of 115,000 metric tons to 180,000 metric tons.

Polysilicon market prices came under further downward pressure during the second quarter, with spot polysilicon prices falling from 35 to 37 RMB per kilogram at the end of the first quarter to 31 to 34 RMB per kilogram at the end of the second quarter. Amid subdued demand, depressed pricing, and accumulating industry-wide inventories, polysilicon producers operated at a low utilization rate, with aggregate output of 5,308 metric tons in the first half of 2026, representing a 9.8% year-on-year decrease.

As we make our way through the third quarter, the continued rollout of anti-emission measures is gaining momentum. In July, a series of mandatory national standards were issued for energy consumption and product efficiency across the solar PV value chain, including the final official version of a new standard setting energy consumption limits per unit of polysilicon output, which will take effect on January 1st, 2027.

Polysilicon manufacturers whose unit energy consumption exceeds 6.3 kilograms per kilogram must complete corrective improvements by that date or face the risk of plant shutdowns. Notably, this threshold of 6.3 per kilogram is stricter than the 6.4 proposed in the draft, signaling regulators' commitment to accelerating the phase-out of inefficient capacity.

On July 27th, the China Photovoltaic Industry Association issued the general principles for cost accounting models in the photovoltaic industry, an initiative to regulate market competition and advance standardized industry governance that lays the foundation for price regulation enforcement. On July 31st, the State Administration for Market Regulation issued price compliance guidelines for the solar PV sector, promoting a structural shift from price competition to value-driven differentiation.

The SAMR emphasized that solar PV companies must conduct price compliance self-reviews and curb irrational low-price competition, and that CPIA should strengthen industry self-regulation, promote the general principles, and guide companies away from illegal pricing practices such as below-cost dumping. The SAMR also indicated that photovoltaic enforcement actions against non-compliant entities.

Together with seven other solar company factors, we jointly signed an initiative to eliminate below-cost sales and fully comply with energy consumption standards on August 6th. As a result of these corrective measures, policy competitors are beginning to show signs of recovery, with spot prices stabilizing and wholesale prices rebounding by more than 10% from their recent lows.

We are also diversifying beyond our core policy competitiveness to hedge against solar PV supply volatility, targeting the fast-growing AI data center power infrastructure market. On June 3rd, 2026, we announced the signing of a memorandum agreement to establish a manufacturing base focused on the R&D, manufacturing, and sale of next-generation energy solutions and related equipment for AI DC.

This includes energy storage systems, solid-state transformers, and solid-state liquid. These technologies support the industry’s adoption of high-voltage direct current architecture, such as the 800-volt DC standards against NVIDIA and other leading AI infrastructure providers.

The platform is anchored by Daqo Group, our affiliated entity under common beneficial ownership with Daqo New Energy, which brings over 40 years of power equipment manufacturing expertise, established technology, deep talent, and customer relationships to accelerate our entry into the segment. We view AI DC power infrastructure as a structural growth opportunity that complements our core business and broadens our earnings base.

Consistent with our strong track record, having navigated several policy cycles, we intend to pursue this expansion in a disciplined manner that preserves our balance sheet strength. Despite a challenging environment, the solar PV industry continues to exhibit compelling long-term growth prospects.

Growing vulnerability in the global energy market have sparked widespread concerns about national energy security, in which the solar PV and renewable energy sectors can play a crucial role. As one of the world’s lowest-cost producers of the highest-quality anti-Passivcon, backed by a robust balance sheet and zero debt, we remain optimistic about the sector and are well-positioned to capitalize on an anticipated market recovery and long-term growth opportunities.

We will continue to strengthen our competitive edge through advancements in higher-efficiency anti technology and cost optimization via digital transformation and AI adoption. As the world accelerates its transition to clean energy, we are confident in our ability to play a leading role in shaping that future.

Now I will turn the call to our CFO, Mr. Ming Yang, who will discuss the company’s financial performance for the quarter.

Mr. Ming, please go ahead.

Thank you, Anita, and hello everyone. This is Ming Yang, CFO of Daqo New Energy.

We appreciate you joining our earnings conference call today. I will now go over the company’s second quarter 2026 financial performance.

Revenues were 62.7 million, compared to 26.7 million in the first quarter of 2026 and 75 million in the second quarter of 2025. The increase in revenue compared to the first quarter of 2026 was primarily driven by higher sales volume, as the company resumed normal sales activities starting in June following a prolonged period with no new policy developments.

Gross loss was 82.7 million, compared to 39 million in the first quarter of 2026 and 81.4 million in the second quarter of 2025. Gross margin was negative 132%, compared to negative 520% in the first quarter of 2026 and negative 108% in the second quarter of 2025.

The sequential improvement in gross margin was primarily due to a decrease in provisions for inventory impairment, which was 55.7 million in the second quarter of 2026 compared to 98.9 million in the first quarter of 2026. SG&A expenses were 15.8 million compared to 12.2 million in the first quarter of 2026 and 32 million in the second quarter of 2025.

The sequential increase was primarily due to higher sales volume in the second quarter of 2026. The year-over-year decrease was also due to the company recognizing 18.6 million in non-cash share-based compensation costs related to its share incentive plan in the same quarter of 2025.

R&D expenses were 1.6 million compared to 0.8 million in the first quarter of 2026 and 0.8 million in the second quarter of 2025. The increase was primarily due to R&D of next-generation energy solutions for AI DC power infrastructure.

R&D expenses can vary from period to period and reflect R&D activities that take place during the quarter. Loss from operations was 98 million, compared to 150.8 million in the first quarter of 2026 and 112 million in the second quarter of 2025.

Operating margin was negative 156%, compared to negative 560% in the first quarter of 2026 and negative 152% in the second quarter of 2025. Net loss attributable to Daqo New Energy Corp shareholders was 81 million, compared to 88 million in the first quarter of 2026 and 76.5 million in the second quarter of 2025.

Loss per basic ADS was $1.20, compared to $1.31 in the first quarter of 2026 and $1.14 in the second quarter of 2025. Adjusted net loss attributable to Daqo New Energy shareholders, excluding non-cash share-based compensation costs, was 81 million, compared to 88.4 million in the first quarter of 2026 and 67.9 million in the second quarter of 2025.

Adjusted loss per basic ADS was $1.20, compared to $1.31 in the first quarter of 2026 and 86 cents in the second quarter of 2025. EBITDA was negative 29 million, compared to negative 83 million in the first quarter of 2026 and negative 48 million in the second quarter of 2025.

EBITDA margin was negative 46.8%, compared to negative 311% in the first quarter of 2026 and negative 64% in the second quarter of 2025. Now on the company’s financial condition.

As of June 30th, 2026, the company had 555 million in cash and cash equivalents, compared to 559.4 million as of March 31st, 2026 and 598.6 million as of June 30th, 2025. As of June 30th, 2026, short-term investment was 215 million, compared to 88 million as of March 31st, 2026 and 118 million as of June 30th, 2025.

As of June 30th, 2026, notes receivable balance was 71.7 million, compared to 20.8 million as of March 31st, 2026 and 49 million as of June 30th, 2025. Note receivable balance, which represent bank notes with maturity within six months.

As of June 30th, 2026, held-to-maturity investment was 51 million compared to 60.3 million as of March 31st, 2026 and zero as of June 30th, 2025. As of June 30th, 2026, the balance of fixed-term deposits within one year was 928.9 million compared to 1 billion as of March 31st, 2026 and 960.7 million as of June 30th, 2025.

Now on the company's cash flows. For the six months ended June 30th, 2026, net cash used in operating activities was 276 million compared to 105 million in the same period of 2025.

For the six months ended June 30th, 2026, net cash used in investing activities was 169.6 million compared to 242.7 million in the same period of 2025. Net cash used in investing activities in 2026 was primarily related to the purchase of short-term investments and fixed-term deposits.

For the six months ended June 30th, 2026, net cash used in financing activities was 7.8 million compared to 32,000 in the same period of 2025. Net cash used in financing activities in 2026 was primarily related to $7.8 million in stock purchases made by the company's subsidiary Xinjiang Daqo from its minority shareholders.

That concludes our prepared remarks. We will now open the call to Q&A from the audience.

Operator, please begin.

Hi, this is Oscar Chen on for Phil. Can you hear me okay?

Yes, you're loud and clear.

Okay. I have two questions.

First question is on government support on poly pricing. Even with the recent 10% rebound in forward prices, poly ASP remain below industry production costs since late Q1.

How would you characterize the central government stance on supply rationalization? Are you anticipating any incremental regulatory support that could help establish a sustainable price floor in the near term?

Then I have a follow-up.

We'll go ahead and translate your question

and then. 这个8月6号嘛。

这是8月6号光伏协会，中国的光伏协会开了一个会嘛，就是希望大家在一起致力于降低成本压销售，大概成本价现在是5万1千百。当然这个当中是中国的反内卷。现在的市场来讲需求也不是太大，但是中国现在的库存大概还是50万到60万吨的库存现货。现在现在来讲是说低于成本价销售，应该讲大家自律是不会再同意的。近期的价钱已经有明显的报价，已经从3万多现在已经到了4万，报价已经超过了4万，主要是现在看政治的落实，这也是反内卷的一个部分的控制。 Okay,

I will translate for our CEO Mr. Xu.

On August 6th, led by the China Photovoltaic Industry Association, there is a strong initiative for self-discipline, and based on the CPIA cost model, the industry average cost is estimated, production cost estimated to be around 50,000 RMB per ton, about 50 RMB per kilogram. Due to the current market environment where demand activity is relatively low, and there's still approximately 500,000 to 600,000 tons of inventory in the industry, we think the price recovery might take a little bit longer than anticipated, but there is strong consensus within the industry for self-discipline, and also with the urging of the government and the related departments, the industry consensus is that it's no longer viable to sell below cost.

What we're seeing in the market is that the quotations for polysilicon pricing from different manufacturers have already exceeded about 40 RMB per kilogram. We're optimistic about the current policy development and we're waiting to see how the policy may be enforced going forward.

我觉得卖方大家都处于一种观望的状态。我们的卖方正在报一个合理的价钱，不能亏损的价格，卖方还在观察，也在一个博弈的过程当中。但我个人认为反内卷，低于成本价的销售，应该讲是不合规，可能也是一种侵掉的行为，也是应该被制止的。这当中就是我们需要在法律框架可以合理合法合规的环境之下进行反内卷的工作。但是我想这个应该会有效果，因为近几年所有的中国的光伏企业，中国的企业，都在推行大量的清单。我想这种长时间的亏损是没有任何的商业模式是允许的。所以我想这个局面我想时间不会太长，应该会有用。其实大家去年的12月份的反内卷第一轮的时候，我们大厂限定也是不亏现金。去年的今年2022年季度。我想这个行动可能会影响到后续会影响到我们做经济的价钱。 So

let me translate for Mr. Xu.

Right now, the industry in terms of the value chain between the buyers and sellers of polysilicon, some of the buyers are still observing the market and the policy development, and they're taking a wait-and-see approach. In terms of the polysilicon manufacturers, they're expecting a reasonable price where they would not be selling at a loss or below their cost.

There is still some, you can call it a wait-and-see between the polysilicon manufacturers and the downstream. We do believe that the past industry practice of selling below cost, especially in the first six months of the year, is likely to end, where the government is very adamant about preventing dumping of the products and selling below cost.

Within the law framework for price law and for the anti-evasion, our expectation is that this is likely to move forward optimistically over the next several months. Then we know that over the past few years, the polysilicon manufacturers, the whole industry in general, have seen significant losses, and we do not think that this is long-term sustainable.

In fact, it is very unsustainable, and this is likely to lead to the industry in trouble. If we look at DQ, especially in December of last year, when the anti-involution policy was more successful, right?

DQ had no cash loss in Q4 2025. We were able to achieve positive operating cash flow during that period.

We think that that's a more sustainable timing framework going forward.

Thank you for the caller, Mr. Xu and Mr.

Yang my second question is on the self-discipline agreement signed in August. Previous rounds of self-regulation kind of struggled to maintain compliance once prices fluctuated.

Just wondering what makes this framework structurally distinct from past attempts, and then regarding the energy consumption requirements, what is your estimate of total industry capacity that could be phased out?

Wait, we're still answering, not translating. Hold on, okay?

Let's give us a minute.

Now

let me translate for Mr. Xu.

We believe that the current round of anti-evasion policy and with the price enforcement is likely to sustain. What we saw in the previous round was that there was this proposal for the industry consolidation platform, right, to accelerate the exit of excess capacity.

The State Administration for Market Regulation stepped in because they were very worried about anti-monopoly practices between the manufacturers, the leading manufacturers. They were worried that this would bring non-market activities or behaviors by the main manufacturers.

This time, the current effort is led by the State Administration for Market Regulation, and this is bringing self-discipline forward. Also this is not, for example, there is no coordination between the manufacturers on pricing or allocation of sales volume, for example, right?

This time it's really based on each individual manufacturer's their own cost, production cost, right? In terms of their manufacturing efficiencies, and for them to sell products based on their ability to produce products at a lower cost.

We think that this time it's actually much more sustainable and is being supported by the government. We think that through these two efforts, right?

One is by being one of the lowest-cost producers within the industry, as well as with the regulations on energy usage. We think that this time it will promote a more market-oriented approach to both capacity exits and to the selling of products at reasonable price.

This is all under the current legal framework brought forward by the government. Hello?

That's all my question. Thank you, Yang.

Thank you.

Thanks, management for taking my question. My first question is a follow-up on the overall initiative to avoid selling below cost.

My understanding is that current inventory in the industry is at quite a high level, and the end demand is also quite weak at the same time. When would you expect the quality price?

For example, you mentioned the price quote at above 40 RMB per kilogram. Given that there are inventory at the wafer players and demand isn't that strong, when would you expect the first batch of transactions at a higher price to happen?

Because in the past two weeks, all the data has halted. We'd like to know when we expect the real transaction is coming out.

Let me translate for Mr. Xu

for

a minute. Okay.

今天我在市场上他们告诉我有少量的成交，大概在四万左右，有少量成交。因为这个还是有需求的，虽然需求比较疲软，但是还有些很多公司，我们的下游企业是宁不准的管理。宁误的管理上它没有赋存，它就为少量地购买，这就是生产需求。这是已经有超过信息啊，了解的信息是我们的了解的信息已经超过十万以上的成交。所以我想这个，但是四万以上的成交和当时的我们大家的先进成本五万，还有一个差距。我想这是在市场。但是我认为我们讲的是不基于先进成本的成交，不是基于成本去成交行为，是一个违法行为，价格法那里是不合理的。所以我想这个经验会进一步地加快。我自己认为是加快，但是现在已经有成交。从上周开始，一直到本一，大概一两星期几乎没有成交。现在已经有少量的成交，我想这个途径我认为可能会加快。那这个契机是什么？大家要信任我们的承诺，对吧？我们大家都有承诺，基于成本。需要是行业自律，配套百亿点的国家一些措施，我想这个可能速度越来越快. Let me translate for Mr.

Xie first, okay, just a minute. 这国家是一个产能的话，一千能耗二级能耗，三级能耗，二级能耗，对吧？意思是我知不清楚。能耗是一个重要的指数，就是因为现在来讲能耗太高，所以你是不合产的，就会被强制淘汰，没有电嘛，这是第一。第二个呢，就是国家呢是根据这个我们的实际一些能耗指标的时候，我们就行业自律，大家来讲呢，就是要自动地减产。我们要自动地减产，大家要有自动减产，这是主要是基于一个诚信，基于一个诚信，一个承诺，大家自动地减产。维持我们说的基于成本下修这个过程。这个呢我觉得还是有信心，因为各个公司的这个事工来做这个参加了会议。OK。当然它个当中有能力生产，还有一些企业，这当中很多中外很多做这个企业，现在六体上到六十台也开不起来，因为它已经没有能力了。因为开动这个生产线的时候，还有一个人的问题，电的问题，时间的问题，对吧？这几个因素要素之后，它有些企业现在已经开不起来了。虽然它号称它能开，可是已经开不起来。可是这产能已经到不了这个量，十百万，二百万，那都很难。现在因为这段时间大家都亏钱嘛，人也招不到，也工人也减少，人已经解雇了，没人了。可能

you

translate for Mr. Xu, okay?

He thinks that the recent energy quota policy from the government, where there's different energy usage requirements for the industry, he thinks this will lead to a forced exit of a significant amount of capacity that have significant or higher energy usage. We're likely to see that happen pretty soon.

Then also the industry self-discipline, and there's a commitment from the various manufacturers that there should be a voluntary reduction of capacity or production, and then also there's a commitment that manufacturers should not be selling below production cost. We think that both of these are likely to happen starting the second half of this year.

Then there’s also the issue that not that many producers actually have the capability to produce, especially now that the industry is running at a fairly low utilization level. A lot of manufacturers have let go a significant number of people.

There’s actually a lack of employees and also lack of training in time. A lot of capacity that has been shut down is unlikely to restart going forward.

Even now, he thinks that, for example, the effective capacity within the industry, close to 3 million tons have been built. The capacity is already less than 2 million tons right now.

It’s likely to go lower as well.

Thank you. My last question is about the AIDC initiative as a second growth driver of the company.

I wonder if there’s more the background or progress to share on this business? Thank you.

Let me translate it. AIDC这种是大成的第二个赛道。因为我们综合考虑光伏的做进规目前的现状，要有一个大的增长其实也很大的难度。大家都很清楚市场的需求，还有光伏发电的这个规模就是可以预见，国内还有这么多企业的追求。所以大成作为我们是做电气产业的行业的这个，应该讲国内在中国这个市场上我们有很大的地位，是高压传动开关。而且今年 AI的发展之后，我们知道了，我们对市场的了解，因为我们是电气设备，应该讲开关、变压器是市场来讲，我们是供不应求。所以我们经过市场的调研之后，我们觉得我们应该跟做AIDC，就是AI有关AIDC相关的事情。我们是最最实实的行业，再讲我们没有第二个智能实现。这基于是什么？我们的专业，我们的人才优势，我们的研发优势。非常厉害，上次这个上个季度的时候，我们公布了我们的做法，我们决定做。我没有和投资者参加这个投资者的会议，因为我与投资者情况，也没有参加这个会议，上次也有这个机会跟各位投资者汇报一下关于大成在AIDC方面的产业优势。因为我们是做这个产品，大成基于这个方面电力行业的基因，所以我们对AI的电力需求的这个需求，市场是比较了解。所以我觉得AIDC这个行业，我们来讲跟我们做的电气设备，包括它里面的电力厂，对吧？包括它里面的这个 IT厂，包括它的发电厂，我们就非常熟悉。这是我们在AIDC的一个现有的产品。同时来说，现在大家都清楚。我们在AIDC上面的SFQ、SFBB、户内开关、户外开关，目前来说，都是全球未来的一个方向。虽然明年没有SFQ没有太多的市场，因为大成用我们的方案，用大成的这些CC800的方案和现在中国阿里的巴马的方案，对这个电力的需求也非常非常有兴趣。所以我们想在这个方面，我们应该利用我们现在大成能源在新能源这里面的资金的优势，我们现在也资金的优势，加上这个里面讲这个巨大的一个增长的空间，我们的投入，这个行业的市场的投入，市场的加入研发投资，这是我们优势的体现，优势的体现。这行业我们就非常熟悉。现在我们在做的是什麽？我们有一个自己的一个研发的队伍，我们是一个上海市的研发的队伍，所以我想着在2026年、2027年，我们应该有销售，我们应该有销售。因为大家知道行业有很多的客户资源，由讲有一流的我们研发团队，我们也想做到世界一流的研发公司，加入我们团队。在AIDC建立这个系统，建立这上面 SFQ这上面，成为行业的领先者，甚至全球的领先者，这是我们的优势。而且我们现在也有现金流，我们有这个现金流。我们可以大胆地去投入，那有时候做一万分的投入。应该讲，我们做到，做建设一个一流的工厂，一个一流的人才的队伍，人才的队伍，一流的制造设备。这尽管讲的时间之间，形成我们的销售，形成我们的收入，为我们这个公司创造利润。因为十年前这整个强调一点，我们这个行业非常熟悉。

Okay, let me translate for Mr. Xu.

We do see that the AIDC-related power infrastructure and equipment market is actually a very viable sector, where it’s going to be a significant growth driver for the company, and it’s the second sector that the company is entering into. I think most investors are probably aware that we do think that the growth for the polysilicon market going forward is likely to be relatively low in terms of volume demand, as well as for solar.

The company is actively looking for other areas of growth. Because Daqo Group has more than 40 years of experience in the power equipment sector, and being one of the leading manufacturer and supplier of high- and low-voltage power equipment, such as transformer and circuit breakers.

Daqo Group is seeing a very strong demand, especially in AI data center-related power equipment demand. We do think this is a very significant and real opportunity for the company.

Daqo Group brings many years of experience and advantage in manufacturing, in R&D, in technology capability. In terms of products as well.

With the growing AI power demand, and especially for the next-generation power infrastructure for IDC, where led by NVIDIA, there’s this future development of a new next-generation equipment under the 800-volt DC infrastructure. We’re targeting initially in the solid-state transformer and solid-state circuit breaker market.

The industry is starting in 2027 next year, and then we expect to see very significant growth from 2028 to 2030, and with power demand from these new AI data centers based on the new 800-volt DC technology. With Daqo Group, right, it brings significant experience and vantage, and at the same time, matching with Daqo New Energy's strong balance sheet and capital position, right, to capture this growth driver.

Now we have built an R&D team in Shanghai, and we expect to have an initial product ready by year end, and then with prototypes, and then achieving sales starting in 2027, and then capturing the growth opportunity in 2028 to 2030, and our goal is to become an industry leader within this IDC power equipment sector by being a tier one, both in terms of product and the team. That's our current goal right now.

Thanks a lot for management. Thank you.

Great,

great. Thank you, Alan.

Sure. Thanks, management, for taking my question.

I have two questions. One is related to the poly business, another to the AI DC business.

First, in terms of the poly business, I think you just mentioned, currently the industry upstream and downstream players is kind of wait-and-see, and given the downstream inventory is at a relatively higher level, I'm not sure what the outcome do you expect after the wait-and-see period? Particularly, we had this kind of self-discipline in first half, like we uphold our pricing, and then we record lower shipments.

I'm wondering, do you have any shipment guidance towards the end of the year? What's our priority going forward?

Will we uphold the pricing to the higher level, like 30,000 per ton, or we are kind of want to reach the balance between price and shipments? I want to hear more about the poly business operations strategy.

Thank you. Okay,

okay. Thank you, Mengwen let me translate your question for Mr.

Xu, and then he will respond. OK.

just怎么看发货?这个我认为我的观点是下半年,我们对我们来讲发货一点,我们产品质量比较好，发货不是问题，主要还是价格的问题。价格的问题，价格问题当中是什么，就是说今年上半年我们发货的比较少，按照我们这个行业智力，大全的产能应该是发货应该超过一年能达到百分之十五左右的市场份额，超过这个份额是合理的。所以这个呢，我们还会进一步地按照我们的上的想法，就是合理的价位我们去发货。但是今天是什么，因为全行业已经贵成了不是一年，所以很多企业很难支撑下去。未来就是我认为一定有一些成本高的企业，现金流不好的企业会被淘汰；第二，能耗不高能耗的，能耗指标不达标的，它会被政府强制淘汰。所以这都是对我们这个利好的事情。所以我觉得是大全能源有足够的现在有这样的好的良好的财务状况和良好的质量标准和良好的质量，还有我们下一个客户的评价好的优势。我想我们下一步我们想在百类的大环境之下，我们想就是能够把我们的库存降得最低。这是我觉得未来。从未来来说，今年我还不敢明确地讲，我们明年的形势更好。因为今年现在大家现在在看下个月是提升。当然不仅仅是我们非片的，包括我们的回片，不只是回收的我们的回片，借此降了一些。因为现在的价格都是基于现进成本价，是完全不合理，完全不合理，也不是什么强调的行为，我认为也是违反价格。所以我想这个应该会有点，也必须是自动平衡。 Okay, let me translate for Mr.

Xu. In the second half, what we believe is that because Daqo New Energy, we have superior quality of product in the market.

Selling and shipping our product is really not an issue. I think the question is really price.

In the first half, because we adhered to self-discipline, we did not sell as much products as our normal market share. Because our competitors were engaged in low-cost sales practices.

If we look at our market share in the past, we believe that we can achieve approximately 15% market share within the industry, and we continue to expect that going forward. Our target is to sell at an appropriate price or a reasonable price, and also be fully compliant with the government guidance and the price law.

What we expect is that, say, in the next six to eighteen months, we're likely to see a forced exit or a market-based exit of manufacturers with high production costs, or manufacturers with poor cash positions or poor cash flow. Companies with not a good balance sheet likely to continue to struggle going forward, while Daqo New Energy, with our cash position and our strong balance sheet, also our high product quality and low cost, we expect that we're likely to do better and to do well in the market, especially in 2027, where we expect to see a much improved and better market environment.

Then we expect to continue to lower our inventory going forward to relatively low inventory levels. That's our target.

Thank you. Can I conclude that we will hold the price in year 2027 and we will wait for the rest of the marginal players to exit, and then at the time we will see fast inventory depletion and the recovery of the shipment is likely to occur in the next six to eighteen months.

I think in terms of pricing, right, we cannot sell below cost, right? We're going to adhere to that, and then at the same time, we'll look for opportunities to sell at a reasonable price, and then for the market to have additional capacity exits.

Yes.

That's super clear. My second question about AIDC, I think we have put out an announcement, like we have six billion RMB total investment, two billion in the first phase.

You just mentioned we will have sales volume recorded in next year. Just wondering, can you share a bit more about the plan for the AIDC business, specifically, like our CapEx timeline and the source of capital for this six billion or two billion investment, and what's our expected payback duration for the first phase of the production base, and what the normalized profitability from this business do we expect will achieve?

Also for other operating metrics, will we have more other sources allocated for this business development, or we can use some of the synergies from our Daqo Group's aligned company? Can you share a bit more regarding to these metrics?

Thank you so much.

Okay. Let me translate your question first quickly.

Hold on.

其实大全这次投资AIDC的相关的设备，主要是里面的是一些我们的方舱机号，SSCB。明年其实看到的是跟电力有关的这个一号。这块我认为明年我们是有销售，应该讲，差不多，明年差不多阶段但很快。同时呢，这是一块，这是一个产业，明年没看到我们的销售。我想这个销售应该讲跟我们对大全的这种应该讲整体的系统，大家性的协同，所以这个能力我们很强，应该讲我们应该讲有。我认为有足够的力量来支撑我们这个产业。至于现在是什么，我们新的投资能够把我们的工厂尽快建起来，其实第二是能够把我们的设备尽快地安装到位，制造的设备到位。当然人才的队伍基于市场和大全集团原来的一些专业的工人，我们会让他到新的工地来工作，新的工地工作，这是我想我们在做。同时我们也启动我们的研发SSC，应该讲今年明年的市场还没有全面的爆发。我想在未来的爆发之前，我们做充分的准备来迎接这一次应该讲一个新的机遇和机会，这就是我们在AIDC。所以我相信明年AIDC一定有销售，一定有应该讲爆破速度非常快的一个趋势。这个我这个行业我非常熟悉。因为现在前期的市场调研，大家对大全，我们的客户，我们的各种合作伙伴，对大家能研究AIDC方面的一些设备，大家是充满了信心和希望。 Okay,

let me translate for Mr. Xu.

Let me just clarify on the investment involved. Even though the total project anticipated investment is six billion RMB, we're only committing the first phase right now, which is about two billion RMB, which will cover all of solid-state transformer, solid-state circuit breaker, and also our e-house total solution for AI power infrastructure, and also some related to energy storage.

The remaining four billion is not committed as of today, and will be planned sometime in the future. Then in terms of our strategy, we're focusing on AI-related power infrastructure equipment, and then we expect to have three primary products, right?

One is a total solution or a package solution, which is going to be a plug-and-play kind of solution for AI power infrastructure, which has all the related power equipment, and also solid-state transformers and solid-state circuit breakers, and also include the related software and control. There is very significant synergy with Daqo Group, because of Daqo Group's experience and know-how, and also their position within the market, we think that actually we can receive significant orders from customers.

We're now in the phase of doing R&D and also the building of related manufacturing facilities. The R&D team is now in place, and we continue to expect to have our prototype ready by year end and getting these products.

In terms of 2026 and 2027, it's really a preparation period and introduction of the products into the market. We think that the market will see a high growth phase from 2028 to 2030, where we do expect a significant ramp-up of revenue during this period for these related products and business.

Thank you, Mengwen.

我说一点。Hi, thank you. For the two billion committed investment, we will expand in 2026?

Over the next two years. This year is only about, I think, it's only maybe 30 to 40 million U.S.

dollars this year, and then the remaining will be over the next two years, actually. Sure.

That's all from me. Thank you.

Thank you. Then our COO will make additional comment.

大全投资的项目,当初是AI目前资金的项目,这个投资项目单项项目。单项项目呢，只是一直在做认证，一直做认证。原来时间呢，就是比较长，但是现在呢，半导体明年的半导体的市场的需求，全球我了解是7.6万吨，但是呢只有5.6万吨，明年的市场产量只有5.7万吨，所以我们现在还是希望尽快把半导体这个项目。 主要是当初在项目。这个是投资项目，半导体项目。半导体项目呢，是今年一直在做认证，一直做认证，就是这个投资。原来时间呢确实比较长，但是呢现在呢，半导体明年的半导体市场的需求，全球我了解是7.6万人，但是呢现在5.6万人，明年的市场产量只有5.7万人，所以呢我们现在还是希望尽快把半导体的这个项目尽快能够拿到认证，拿到认证。半导体的行业给我们带来真正的价值。这当然需要我们去专门追这个团队把它做起来。

Okay. And

Mr. Xu will provide an update on our semiconductor polysilicon business, where the company has spent a total investment, including land and related equipment, of about 1.2 billion RMB into the business.

We've been doing product trial production and also in terms of qualification with our customers. The qualification cycle has been much longer than we anticipated, but we're continuing to do this.

He's very optimistic that he's looking at very significant market demand, where the demand for semiconductor polys is roughly 75,000 tons per year, while right now the current industry production for semiconductor polys is only about 57,000 tons per year. He's expecting a very significant growth for this product, this market sector.

We're going to ramp up and reinvigorate our activities for this.

Thank you everyone again for participating in today's conference call. Should you have any further questions, please don't hesitate to contact us.

Thank you and have an awesome day. Goodbye.