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Daqo New Energy Expands into AI Data-Center Power with 6 Billion-Yuan Kunshan Facility
On June 3 2026, Daqo New Energy Corp. (NYSE: DQ) revealed a strategic pivot from its core polysilicon business toward the high‑demand world of AI data‑center power. The company will build the Daqo Smart Energy System Manufacturing Base in the Kunshan Economic and Technological Development Zone, Jiangsu province, where it will produce energy‑storage systems, solid‑state transformers, circuit breakers, and batteries tailored for AI workloads.
The project is split into two phases. The first phase commits 2.1 billion RMB, while the total planned investment tops out at roughly 6 billion RMB—about US$840 million. Funding will flow through Daqo Energy Technology (Shanghai) Co., Ltd., a subsidiary of Daqo New Energy. The base will handle research, development, manufacturing and sales of next‑generation energy solutions for AI data centers.
Daqo’s move signals a deliberate diversification from its high‑purity polysilicon supply chain for photovoltaic (PV) manufacturers. The firm already operates a monocrystalline silicon and polysilicon plant in Shihezi, Xinjiang, and has shuttered wafer and module facilities in Chongqing and Nanjing. The Kunshan project aims to create new growth engines amid the global energy transition and the rising need for specialized power infrastructure in AI data centers.
AI data centers demand vast, reliable power, sophisticated conditioning, and robust energy‑storage to support the high‑frequency, high‑throughput workloads of training and inference. By manufacturing solid‑state transformers and energy‑storage systems, Daqo intends to leverage its silicon‑processing expertise to enter the power‑electronics market that serves the AI sector.
The Kunshan Economic and Technological Development Zone covers 115 square kilometres near Shanghai and hosts a range of high‑tech manufacturers. The new Daqo facility will benefit from the zone’s infrastructure and logistics network.
Compared with the 17.7 billion yuan Daqo invested in a large polysilicon expansion in the past, the Kunshan project is modest. The company’s debt‑free balance sheet and low‑cost production model have positioned it as a leading polysilicon supplier in the solar market.
Industry analysts point to rapid growth in the AI data‑center market. Major technology firms are projected to spend more than US$650 billion on AI data centers in 2026, with demand for specialized power equipment representing a growing share of that spend.
Daqo’s announcement follows a broader trend of energy‑related firms expanding into AI‑infrastructure services. The new facility will produce components that can be integrated into data‑center power‑distribution systems, potentially opening new revenue streams.
While the project’s full timeline remains undisclosed, the initial 2.1 billion RMB phase has already been signed. The company has not announced specific product launch dates or production capacity targets.
In short, Daqo New Energy is extending its manufacturing footprint beyond polysilicon into the energy‑electronics space for AI data centers. The 6 billion RMB Kunshan facility will focus on energy‑storage systems, solid‑state transformers, and related equipment. The move is part of a diversification strategy aimed at capturing growth opportunities in the global energy transition and the expanding AI infrastructure market. Next steps will involve prototype development, securing supply‑chain partners, and establishing production lines, though concrete timelines remain to be announced.
The project is split into two phases. The first phase commits 2.1 billion RMB, while the total planned investment tops out at roughly 6 billion RMB—about US$840 million. Funding will flow through Daqo Energy Technology (Shanghai) Co., Ltd., a subsidiary of Daqo New Energy. The base will handle research, development, manufacturing and sales of next‑generation energy solutions for AI data centers.
Daqo’s move signals a deliberate diversification from its high‑purity polysilicon supply chain for photovoltaic (PV) manufacturers. The firm already operates a monocrystalline silicon and polysilicon plant in Shihezi, Xinjiang, and has shuttered wafer and module facilities in Chongqing and Nanjing. The Kunshan project aims to create new growth engines amid the global energy transition and the rising need for specialized power infrastructure in AI data centers.
AI data centers demand vast, reliable power, sophisticated conditioning, and robust energy‑storage to support the high‑frequency, high‑throughput workloads of training and inference. By manufacturing solid‑state transformers and energy‑storage systems, Daqo intends to leverage its silicon‑processing expertise to enter the power‑electronics market that serves the AI sector.
The Kunshan Economic and Technological Development Zone covers 115 square kilometres near Shanghai and hosts a range of high‑tech manufacturers. The new Daqo facility will benefit from the zone’s infrastructure and logistics network.
Compared with the 17.7 billion yuan Daqo invested in a large polysilicon expansion in the past, the Kunshan project is modest. The company’s debt‑free balance sheet and low‑cost production model have positioned it as a leading polysilicon supplier in the solar market.
Industry analysts point to rapid growth in the AI data‑center market. Major technology firms are projected to spend more than US$650 billion on AI data centers in 2026, with demand for specialized power equipment representing a growing share of that spend.
Daqo’s announcement follows a broader trend of energy‑related firms expanding into AI‑infrastructure services. The new facility will produce components that can be integrated into data‑center power‑distribution systems, potentially opening new revenue streams.
While the project’s full timeline remains undisclosed, the initial 2.1 billion RMB phase has already been signed. The company has not announced specific product launch dates or production capacity targets.
In short, Daqo New Energy is extending its manufacturing footprint beyond polysilicon into the energy‑electronics space for AI data centers. The 6 billion RMB Kunshan facility will focus on energy‑storage systems, solid‑state transformers, and related equipment. The move is part of a diversification strategy aimed at capturing growth opportunities in the global energy transition and the expanding AI infrastructure market. Next steps will involve prototype development, securing supply‑chain partners, and establishing production lines, though concrete timelines remain to be announced.
