GCL TECH (03800) has announced the commencement of construction for Phase Two of its Leshan project, adding 200,000 tonnes of new production capacity, following the successful operational launch of the first phase in June 2026.
The company disclosed that its Phase One 200,000-tonne lithium iron phosphate (LFP) cathode material project in Leshan, Sichuan Province, officially commenced commercial operations in June 2026. The facility utilises the GCL-PHY one-step process technology, a globally pioneering iron-red method for LFP production, which has been licensed free of charge by GCL Group, an associate of the company's major shareholder.
The board has confirmed that post-commissioning, the products have successfully passed rigorous validation procedures with key customers, meeting all performance requirements. The LFP materials business has secured multiple orders, with production capacity steadily ramping up, and full-capacity operations are expected to be achieved by the end of October 2026.
Construction work for the second phase, adding another 200,000 tonnes of capacity, has now commenced, with production anticipated to begin around the end of the first quarter of 2027. The company reports that existing orders already fully cover its entire planned production capacity, with clients comprising leading enterprises in the industry.
Where the growth strategy stands
As production at the Leshan facility gradually ramps up and orders from market-leading customers continue to be delivered, the group is poised to further cement its leading position in the LFP cathode materials sector. The successful commissioning of the Leshan project marks a significant milestone in the company's "solar-plus-storage longevity" strategy, ushering in a new phase of development across several key dimensions.
First, the second growth curve is accelerating: the LFP materials business is set to contribute incremental revenue and profit, diversifying the income structure and reducing reliance on the photovoltaic polysilicon segment. Second, the technological moat continues to deepen: the scaled application of the GCL-PHY one-step process further validates its comprehensive advantages in cost, efficiency, and environmental performance, establishing formidable technical barriers.
Third, industrial synergies are emerging: granular silicon (the photovoltaic core) and LFP (the energy storage second curve) form a positive reinforcement loop—from silicon cost reduction driving photovoltaic installation growth, which in turn fuels energy storage demand, ultimately boosting LFP shipment volumes. Fourth, the valuation narrative is being reshaped: as the revenue contribution from LFP materials increases, the group is transitioning from a traditional "photovoltaic cyclical stock" to a "multi-product new energy materials platform company."
Progress on silicon-carbon anode business
Regarding the silicon-carbon anode business, the board confirmed that the group's 10,000-tonne silicon-carbon anode and supporting porous carbon pilot project has recently commenced operations in Xuzhou. The self-developed porous carbon material serves as the core proprietary raw material for the company's silicon-carbon anode products. The pilot line adopts an innovative process with a single-furnace capacity of 1,000 tonnes per year, built on the group's independent intellectual property and self-developed core technology, representing a significant phased milestone in key materials, scaled preparation, and equipment development.
The project has now entered the process optimisation and product validation stage, with customer sampling and verification efforts with leading clients to be rolled out sequentially. Going forward, the company will steadily advance capacity ramp-up and product introduction based on customer validation progress and market demand, accelerating the industrialisation of silicon-carbon anode materials.
Additionally, the company has signed a formal cooperation agreement with the People's Government of Wutongqiao District, Leshan City, regarding the transformation of the Leshan project from granular silicon to silicon-carbon anode production. This agreement addresses the funding requirements for upgrading and renovation, facilitating the orderly implementation of the transformation project.
A window of opportunity
The silicon-carbon anode industry is currently entering a critical window for industrialisation. As the world's largest producer of silane with 600,000 tonnes of capacity, the group is well-positioned to seize this industry opportunity and build a new business growth trajectory.
According to internal calculations, based on actual data validation from the pilot line, compared to building a new production line of equivalent scale, by repurposing existing granular silicon production facilities and integrating silicon-carbon anode technology, capital expenditure is significantly reduced and commissioning timelines are substantially shortened. The thousand-tonne single-furnace capacity far exceeds the industry mainstream of hundred-kilogram production units, achieving cost optimisation and energy savings with reduced carbon emissions.
In summary, the group aims to establish the world's largest silicon-carbon anode production base in Leshan. Leveraging industry-leading cost management capabilities, the company intends to significantly lower the price threshold for silicon-carbon anode materials while maintaining healthy profit margins, driving rapid penetration in downstream applications and securing a first-mover advantage during the early stages of industrialisation.