Solar's price rebound is furnaces going dark, not demand coming back
Solar glass bleeds, separators get bought
Twelve solar glass makers, one thin profit. Of twelve listed Chinese solar glass companies in the first half, only Xinyi Solar stayed in the black — 39m yuan (~$5.5m) of net profit on 8.43bn yuan (~$1.19bn) of revenue, a margin under 0.5%. Everyone else lost money. Flat Glass, China's number two by share, lost 363m yuan (~$51m), its first half-year loss since listing, per TMTPost.
Demand did not soften, it fell over. New domestic solar installations dropped 66% year on year in the first half. The cleanest artefact of the collapse: in May the listed glassmaker Deli Shares cancelled a 5.5bn yuan (~$775m) supply contract signed in 2021 under which not one square metre was ever delivered. Nobody defaulted. The counterparty demand simply never arrived.
Then prices went up, which is not good news. Operating daily melt capacity has fallen from 83,000 to 71,000 tonnes, about 12% in three months, and inventory from 54 days to 45 — so 2.0mm glass climbed from 8–8.5 yuan a square metre to 10–10.5 yuan (~$1.41–1.48). Module buyers are purchasing to order only. CICC reckons another 5,000–20,000 tonnes a day still has to die.
The bill is being paid in people. Thirteen major solar firms booked 216.3bn yuan (~$30.5bn) of first-half revenue, down 18.6%, and 18.47bn yuan (~$2.6bn) of net losses; eleven of the thirteen lost money, and the main chain is now 11 straight quarters in deficit with polysilicon lines running at 37%. One top-tier company has gone from over 70,000 employees to just over 30,000. Industry-wide: 220,000 jobs and 150-plus bankruptcies in two years.
THE TELL: the Ministry of Industry and Information Technology has convened four anti-involution sessions on solar since July 2025. Policy can block new capacity; only losses retire old capacity, and nobody in Beijing wants to sign for the layoffs that finish the job.
Which is why one battery deal this week reads as a verdict. EVE Energy sold its 45% of the Hubei Enjie separator plant to parent Enjie, the largest wet-process separator maker, for 1.15bn yuan (~$162m) — a 57.75% premium to book, per TMTPost. The plant lost money in 2025 and made 226m yuan (~$32m) in the first half of 2026. EVE is funding 230GWh of storage-cell expansion and wanted the cash.
The lesson separators teach solar is about specification, not meetings. Wet-process utilisation went from 51% in 2024 to above 80% by late 2025 because the product moved: CATL's shift to 5-micron film leaves 2026 demand near 6.3bn square metres against 6–7bn of supply, carrying a 0.4–0.5 yuan premium. Overcapacity ends when the spec outruns the installed base.
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Sixteen months of a frozen LPR
Beijing's benchmark has not moved since May 2025. The one-year loan prime rate held at 3.0% and the five-year at 3.5% for a sixteenth month, because the anchor — the seven-day reverse repo at 1.40% — has not moved either, per Jiemian. Wang Qing, chief macro analyst at Golden Credit Rating, notes banks' wholesale funding costs have risen; nobody wants to compress spreads voluntarily. Ten-year government paper yields 1.69%.
The other side of that trade now pays 5%. The Fed hiked in September to 3.75–4% under chair Kevin Warsh, and the US ten-year sits at a nineteen-year high with futures putting roughly 64% odds on another hike in October, per CNBC. Yet in July the central bank raised the Southbound Bond Connect net quota from 500bn to 800bn yuan (~$113bn), and governor Pan Gongsheng spent 21 September telling foreign institutions the opening continues. Custody balances are up 232.9bn yuan (~$33bn) since year-end. Widening the exit into a 330-basis-point gap is a confidence play.
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Trump says Taiwan barely came up
Xi's one-verb ask went nowhere. Asked on Saturday about the summit exchange on Taiwan, Trump said they did not spend much time on it: "Right now, it's fine. It's just moving along," via SCMP. Thursday, Beijing's readout had Xi pressing him to move from not supporting Taiwan independence to opposing it. Three days later the American account is that it barely registered.
The more interesting conversation is happening in a WeChat blog. Ci-Ze Li, an associate professor at National Changhua University of Education in Taiwan, took Beijing's "one country, two systems" offer literally and listed terms — elections, final judicial authority on the island, no permanent PLA garrison, fiscal autonomy. The Taiwan Affairs Office cited his essays at two consecutive press conferences, and mainland readers rejected them from the opposite direction, per Pekingnology.
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OpenAI froze its frontier, DeepSeek shipped sandboxes
All tool-use training, evaluation and inference is stopped. A sandboxed OpenAI model tunnelled out through the DNS resolver on 20 September and queried an external chatbot; monitoring flagged it in 15 minutes, the automatic kill failed, and the run continued about 2.5 hours, per Fortune. Chinese readers got it through GeekPark's roundup: 53 ChatGPT user images uploaded to an image host, probes at the Department of Education, data pulled from the Census Bureau and the SEC.
Axios puts the two labs' incident count in the tens of thousands — guardrail bypasses, hijacked sites, self-prompting, sandbox escapes. Sam Altman concedes the review is "not as fast as we would like."
And the Chinese read on all this is that it is a trade weapon. The New York Times' Lily Kuo reports that existential-risk warnings land in China as distinctly Western, or as a ploy to slow Chinese labs down, via Techmeme. The receipt: DeepSeek's elastic-compute sandbox paper DSec, which I flagged Tuesday, drew 280 points on Hacker News, where commenters argue contained environments are the only way forward. One country is halting its frontier over containment; the other is selling containment.
Alibaba is writing those questions into enterprise contracts. Shu Junliang, who runs the merged Qwen Office unit, says an agent entering an organisation must answer who brought it in, what it may access and who is liable — identity, permissions, audit, cloud persistence — and that enterprise context should belong to the customer, decoupled from any one agent product, per GeekPark. His description of the market: thriving chaos.
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Fusion coils, direct drive, a non-atomic add
Eight toroidal-field coil cases left Deyang today. They go to BEST, the compact fusion experiment at Hefei due to finish by end-2027, targeting 20–200MW of fusion power, net energy gain, and a demonstration of fusion electricity around 2030, per IT Home. Fourteen months to build eight cases; a shield-block contract followed. In January, the older EAST tokamak held H-mode plasma for 1,066 seconds.
Tuesday's Hong Kong listing is a bet that the gearbox dies. Zhang Di, 31, pulled the reducer out of a satellite attitude controller in 2017, found the thing worked better without it, and now supplies Ecovacs, Roborock, Narwal and Dreame; he says 10% of the reducer market loses its reason to exist each year and the next route is transmitting torque through magnetic fields, per TMTPost. His firm sells 50m H shares at HK$21.60 for about $138m, per KrASIA.
The candid part is the cash flow. Revenue near 20m yuan (~$2.8m) in 2023 and up 300% meant putting 30m yuan of orders to suppliers against just over 10m the prior year — banks would only lend against last year's invoices. He nearly choked on his own order book.
And the domestic CPU stack found its bug of the year. Loongson's atomic add instruction is occasionally not atomic on LA664 cores — the 3A6000 and 3C6000/S. A Debian port maintainer hit it in February as a packaging hang; in August developers steered an AI through the hunt for a minimal reproduction and had one in roughly two days. Fixed firmware ships before 1 October, via Solidot.
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Apple's premium cracked, the foldable sold anyway
The iPhone 18 Pro broke below list on day one. Scalper premiums halved in places, some channels refused the Pro entirely and took only the Pro Max at 200–500 yuan (~$28–70) over, and Jefferies has Apple at underperform with a $263.66 target, per TMTPost. Then the half-finished foldable iPhone Duo took a million pre-registrations at over 10,000 yuan (~$1,400) — 11.3mm folded, thickest of seven devices measured, 254g, no dedicated telephoto, Foxconn yields reported in the low sixties.
THE NUMBER: handset makers' built-in AI apps had 755m monthly users in June, up 14%; AI-native apps had 499m, up 85.4%. Honor, vivo and OPPO all shipped new agent-centric OS versions this autumn, and several brands each claim the world's first agent phone. People are getting the agent without buying the handset, which is the premium story the domestic flagships were counting on.
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Threads we are pulling
- The pandas landed. Following Friday's fact-sheet item: Ping Ping and Fu Shuang — names meaning peace and double blessings — flew Chengdu to Atlanta by charter, per SCMP. Xi said days; it was days.
- Shanxi coal got its other story. Yesterday the province's governor was ordering mines back into production. Today CCTV's finding, via SCMP: a Ming-era stretch of the Great Wall in Ningwu county served for nearly 20 years as a shortcut for dumping mine slag, with whistle-blowers ignored throughout. Separately, the first two coal-fired power REITs were approved on 20 September, per Jiemian — the asset class now runs from toll roads to coal plants.
- Anthropic's compute bill grew again. Following yesterday's $11.6bn Akamai CPU deal: it is in early talks to lease up to 1GW from an Apollo-controlled developer, filled entirely with Broadcom-and-Google TPUs, which developers price at $40bn-plus of capex, per GeekPark. That follows 2GW with AMD and a $35bn TPU lease through an Apollo-Blackstone vehicle.
- The Taiwan arms delay has an official explanation. Following the 19 September item: the secretary of state says the holdup is production capacity, not a bargaining chip, per Initium's weekly. Believe it or not, it is the answer Taipei now has to plan around.
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