The abrupt closure of RW Silicium, Germany’s last remaining producer of silicon, casts a stark shadow over the nation’s industrial ambitions and highlights the precariousness of European supply chains amidst a burgeoning geopolitical landscape. Set to cease operations by December 2025, the Pocking facility’s collapse underscores the accelerating erosion of domestic manufacturing capabilities and raises critical questions about the efficacy of government intervention.
According to AMG, RW Silicium’s parent company, the decision follows three years of unsuccessful attempts at securing a viable economic future for the site. Heinz Schimmelbusch, AMG’s CEO stated the facility was no longer sustainable, despite sustained efforts. The closure impacts 110 employees, who are scheduled to receive formal notification this Friday, followed by negotiations regarding severance conditions.
Established in 1942, the Pocking plant once boasted production of approximately 30,000 tons of metallurgical silicon annually. This crucial material forms the bedrock of numerous industries, including electronics, solar energy and battery production – sectors strategically prioritized for growth within Germany’s energy transition and broader industrial modernization plans. However, in recent years, only a fraction of the plant’s furnaces remained operational, with significant portions of the workforce placed on reduced hours.
While broader economic trends have contributed to the plant’s decline, a primary catalyst has been the dramatic surge in electricity prices following Russia’s invasion of Ukraine. Schimmelbusch revealed that electricity costs tripled to nine cents per kilowatt-hour, a crippling blow for a silicon producer, an industry intensely energy-intensive. A simultaneous downturn in demand, coupled with aggressively priced imports primarily from China, exacerbated the situation, reportedly forcing RW Silicium to operate at a loss of up to 40 percent below production costs.
The timing of this closure is particularly unsettling for policymakers who are desperately striving to bolster European independence from critical raw materials. The move is a direct consequence of escalating export restrictions imposed by China on rare earth elements and other strategic metals, previously considered a near-monopoly source for many European industries. Germany’s inability to sustain its own silicon production undermines the very foundation of these strategic independence goals and exposes the vulnerabilities of relying heavily on a single global supplier.
RW Silicium’s demise is not an isolated incident. The Duisburg-based PCC Group, similarly impacted, temporarily suspended its silicon production in Iceland earlier this year, resulting in layoffs for over 100 employees. Peter Wenzel, PCC’s CEO, has voiced concerns over “increasingly unfair and ruinous competition” from imports, criticizing the lack of safeguards against substandard production practices. He specifically highlighted the influx of “dumping imports from China” alleging the exploitation of forced labor and environmentally damaging processes in regions like Xinjiang. This concern over the import of ethically compromised materials represents a growing dilemma for European policymakers attempting to reconcile strategic autonomy with the realities of globalized trade. PCC remains hopeful for an anti-dumping complaint to be successful and retains the option to reopen the Icelandic facility, though the long-term viability remains questionable.
The closure exemplifies a failing within Germany’s industrial policy, demanding a re-evaluation of strategies for safeguarding domestic industries and confronting the inherent challenges of competing within a market heavily influenced by state-subsidized producers operating under vastly different regulatory frameworks.