#China #Shanghai #Daqo New Energy #Xinjiang Daqo #Lawsuit Update

Daqo New Energy's Latest Legal Developments

Daqo New Energy Corp. (NYSE: DQ), a prominent manufacturer of high-purity polysilicon for the solar photovoltaic industry, has recently provided an update regarding a legal dispute involving its subsidiary, Xinjiang Daqo New Energy Co., Ltd. This article outlines the key developments regarding the litigation, including court rulings and the potential implications for the company.

Background of the Lawsuit

In April 2024, Xinjiang Daqo received a court summons from Xinjiang Xian'an New Materials Co., Ltd. and its affiliate, Xinjiang Dengbo New Energy Co., Ltd., as part of a lawsuit related to a contract dispute. These plaintiffs had previously supplied silicon core processing services to Xinjiang Daqo and were seeking the termination of their business cooperation agreement along with compensation for alleged losses totaling approximately RMB 1.96 billion. This figure was later reduced to RMB 742.7 million, mainly covering consequential damages claimed by the plaintiffs.

Court Decisions and Appeals

The developments surrounding this case have been notable. In July 2024, the first-instance court ruled in favor of the plaintiffs, confirming the termination of the business cooperation agreement and granting compensation for losses and legal fees amounting to RMB 3.16 million. However, the plaintiffs' claims for additional consequential damages were rejected at that time. Following this decision, the plaintiffs decided to appeal the ruling.

In March 2025, the higher court overturned the first-instance ruling and sent the case back for retrial. This led to further anticipation regarding the eventual outcome of the litigation, which could have significant financial implications for Xinjiang Daqo.

Recent Verdict of the Retrial

Recently, a new verdict was pronounced in the retrial, which once again affirmed the termination of the business cooperation agreement. The court ruled for Xinjiang Daqo to pay RMB 3.30 million in losses and attorney fees to the plaintiffs, while similarly dismissing their claims for consequential damages. This ruling reinforces the ongoing complexities and fluctuations in the case, as the company continues to navigate the legal landscape.

Future Implications

The ultimate impact of this litigation on Xinjiang Daqo remains uncertain and will depend on any forthcoming legal challenges or appeals by the involved parties. Daqo New Energy has already disclosed pertinent information regarding this litigation in their annual reports and other company communications. Their transparency highlights the company's commitment to keeping stakeholders informed about potential risks and outcomes that may affect their operations.

About Daqo New Energy Corp.

Founded in 2007, Daqo New Energy Corp. is recognized as a leading entity within the solar PV sector, specializing in high-purity polysilicon. The company operates with a sizable production capacity of 305,000 metric tons, positioning itself as one of the most cost-effective producers globally. Its products are critical components for photovoltaic manufacturers who convert polysilicon into solar power solutions, including ingots, wafers, cells, and modules.

For more information, visit www.dqsolar.com.

Conclusion

As Daqo New Energy continues to address the challenges posed by this legal situation, the company remains focused on its core business of advancing the solar energy supply chain. Stakeholders and investors will be keenly observing the developments as this litigation progresses, given its implications for the company’s financial performance in the future.