German solar wafer start-up NexWafe GmbH is expanding to the U.S. in an effort to counter China’s dominance in the market.

The company has established a U.S. subsidiary, which aims for an initial target production volume of six gigawatts, according to a statement. The decision is “a strategic move to reduce vulnerabilities in the solar-wafer supply chain,” it said, adding that the U.S. solar industry — thanks to the Inflation Reduction Act — has tremendous growth potential.

While multiple U.S. companies have committed to photovoltaic manufacturing, “we see a significant bottleneck in the supply chain for a domestic source of silicon wafers,” said Jonathan Pickering, the vice president of Business Development for North America.

China has a market share of over 95% for global wafer production, according to the International Energy Agency.

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While the firm is joining other European energy companies in expanding in the U.S., it offers a rare example of a German solar manufacturer that is still actively pursuing investments in its home country. A dramatic fall in Chinese module prices in 2023 — along with tariff measures in the U.S. and India — has pushed many other European solar producers into a crisis.

Last week, Swiss solar-panel maker Meyer Burger Technology AG also announced it will invest in the U.S. but threatened to close its German manufacturing site if the government doesn’t come up with aid measures by February.

Nexwafe is currently building its first commercial facility with over 250 megawatts of capacity in Bitterfeld, Germany, and aims to start operations in the second half of 2025.