Saudi Arabia is the top contender to become the destination for China-based GCL Technology’s first polysilicon factory abroad, Bloomberg reports. The world’s second-largest manufacturer of polysilicon — a key component in PV cell manufacturing — is looking to build a plant in the kingdom with a capacity of 120k tons a year, joint CEO Lan Tianshi said in an interview with the news outlet. GCL Tech could start operations as early as 2025, he said, adding that the company has already filed for registration and is in talks with local government officials and the royal commission.

GCL technology is still considering other countries: Tianshi and other executives have made visits to Qatar and expressed interest in speeding up implementation of polysilicon plants, according to Bloomberg. The company has also considered potential expansions into Mexico, to serve the North American market, and in Australia, Tianshi said. GCL has also been eyeing Europe and Brics countries, and said it will likely disclose the new factory’s location by the end of the year. The US was excluded from consideration from the start due to its high production costs.

China is looking to diversify investments abroad as margins dwindle: Chinese solar companies are struggling with dwindling margins amid fierce competition, Bloomberg notes. A wave of consolidation and acquisitions in the solar supply chain is a probable outcome of the squeezed margins, Tianshi explained, adding that only five to 10 players are likely to survive in the industry.

Saudi-Chinese diplomatic relations are booming: The Chinese company’s interest is the latest sign of increased energy cooperation between the two countries after President Xi Jinping visited Riyadh last year. At last month’s BRICS forum, China also invited Saudi Arabia to join the group.

KSA is paying it back: Saudi Arabia’s Acwa Power plans to kick off operations in China starting next year as it expands its presence in renewables-driven countries, according to CEO Marco Arcelli. “The push into China and other Asian markets will focus on developing desalination, green hydrogen, and renewable energy projects,” Arcelli said.

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