The three-year competition for silicon betweensolarand semiconductor companies will end later this year as silicon manufacturers roll out new production lines, according to a new report released Thursday by the Prometheus Institute and Greentech Media.

For decades, silicon has played a starring role in the rise of the chip industry. Its semiconducting properties and relatively cheap price have helped to make it possible to engineer smaller and faster chips to run iPods and laptops.

The vast majority of today's solar panels also rely on silicon to turn sunlight into electricity. The growing worldwide interest in solar energy has pitted solar companies against chip businesses in recent years, particularly because silicon producers couldn’t make enough to satisfy both types of customers.

In 2007, solar companies used more silicon than the semiconductor industry, said Travis Bradford, president of the Prometheus Institute, in the report. The solar industry used about 30,000 of 48,900 metric tons of silicon produced worldwide last year.

By 2012, the total silicon-manufacturing capacity could reach more than 261,742 metric tons, according to Bradford’s report, “Polysilicon: Supply, Demand and Implications for the PV Industry.”

Major silicon suppliers expected to have new plants or expanded production lines ready to go by the end of the year include REC, MEMC, Wacker and Hemlock (see chart below).

Bradford also highlighted two new companies entering the field: China-based LDK Solar, which in April raised $400 million to construct a 1,000- and a 15,000-metric-ton plant, and DC Chemical, a South Korean firm due to open its 5,000-ton plant this year.

The report forecast an additional source in upgraded metallurgical silicon, which will have to be blended with purer silicon until companies are able to improve the quality of the metallurgical material.

Elkem in Norway, Dow Corning in Brazil and Timminco in Canada are prominent players in the metallurgical silicon business, said the report.

Building and operating a silicon plant isn’t an easy task, and many companies have continued to struggle to carry out their plans. China-based Trina Solar, for example, in April backed out of a plan to build a manufacturing center.

All the new and expanded supplies are good news for solar companies. But Bradford has previously cautioned that the industry could end up with a silicon glut (see Oversupply of Silicon to Be Worse Than Expected, Analyst Says, Solar Sector Heading for a Shakeout, Solar Margins About to Shrink? and Panelists Debate When the Silicon Shortage Will End).