The petrochemical industry has been stuck in an intensely competitive red ocean market. The Chinese government has begun promoting measures to curb excessive internal competition, and the cycle of low-price competition is expected to ease in 2026. Formosa Chemicals & Fibre Corporation (FCFC) launched a streamlining plan in the second half of 2025 and is actively shifting toward the compound plastics market. To enter higher-end markets, FCFC plans to complete 5N hydrogen purification equipment by 2027 to secure a foothold in the electronics industry supply chain, while continuing research and development in silicon carbide to align with advanced chip thermal management technologies.
Affected by excess petrochemical capacity in China and low-price competition, FCFC, one of the Formosa Plastics Group's "Big Four," reported a net loss attributable to the parent company of NT$5.488 billion (US$173.8 million) in its 2025 financial statements, reversing from a net profit of NT$379 million in 2024. This marked the company's first loss since its listing.
Facing a brutal price war environment, the Chinese government began implementing anti-over-competition measures in 2025, which are expected to place some restraint on price-cutting practices. After India lifted BIS certification requirements, Chinese products have been able to enter the Indian market, benefiting domestic industries and supporting the renminbi. The US reciprocal tariff policy has been finalized, giving customers clearer visibility on costs toward the end of 2025 and allowing smoother trade flows. However, with oil prices expected to trend downward in 2026, inventory control remains necessary to avoid inventory valuation losses.
FCFC began its streamlining plan in the second half of 2025, consolidating product lines including aromatics, SM, nylon, ABS, PS, and textiles. Based on current market conditions and operations, the company said its scale will not be further reduced. At the same time, it continues to expand differentiated products, specifically in plastics, to gain access to the compound plastics market. FCFC said it will complete the solicitation process in 2026 to sell excess electricity from its Xingang and Longde facilities to computing center operators, while continuing to develop small-scale hydropower generation.
To expand into the specialty chemicals market, FCFC acquired more than a 9% stake in Lumtec in September 2025. By combining Lumtec's R&D capabilities with FCFC's production management, the two companies intend to jointly develop specialty chemicals for applications including smartphone heat dissipation films and flexible printed circuit films. The company plans to complete technology transfer in 2026 and enter higher-end markets.
Additionally, FCFC said it will complete 5N hydrogen purification equipment in 2027 to seek entry into the electronics industry supply chain. The company also continues to develop silicon carbide technologies, targeting thermal management applications for 12-inch chips. It has successfully produced silicon-based weather-resistant ASA, and in 2026 will promote plastic components for outdoor products, including applications such as automotive parts, boats, personal watercraft, and charging station enclosures.
Article translated by Emily Kuo and edited by Jerry Chen
