Good morning, everyone, and welcome to the second quarter live webcast with REC Silicon, hosted by Arctic Securities. My name is Daniel Stenslet. I work as an equity analyst here at Arctic, and I will moderate this session. And with me today, I have CEO Tore Torvund and CFO James May, who soon will take you through the highlights from second quarter. After their presentation is concluded, we will move into Q&A, and I urge you all to use the chat function on your right-hand side to send me questions along the way, so we can wrap up with a Q&A session towards the end. And with that, I think we're ready to begin the presentation, and I will leave the word to Tore and James.
Good morning, and welcome to the Q2 presentation for REC Silicon. It will be James May, our CFO, and myself will take you through the numbers today. On your screen, you will now see the highlights. We increased the revenues during this quarter to $31 million, compared to $24.7 million in the last quarter. Also, the EBITDA became then 2.9, versus 1 in Q1 of this year. Also, the cash balance went up by $1.3 million, so we have $31.6 million in cash in the bank for the moment. The main reason for these positive numbers is that we sold more silicon gas, and last quarter, we came in at 831 metric tons.
Also, we sold more polysilicon, semiconductor polysilicon, which came in at 203 metric ton during this quarter. Due to the COVID-19, there is nothing new concerning the divestment of Butte. We have still several interested parties, but they have not been able to travel to Butte due to the coronavirus, and that's why we are still pending on the divestment of the Butte plant. Concerning the COVID-19, we have had no cases within our Moses Lake plant, nor on our Butte plant, and we have strict restrictions to keep it that way. And hopefully, we will not have any cases.
But as you know, in the U.S., the number of cases are still growing, and it is definitely necessary with strict restrictions also in the coming months. You will see that we have an impairment of $23 million. And James will explain you the details behind this. But the reason is that we have then extended the lease for industrial gas in Moses Lake. The main reason for this was that we have then renegotiated the contract, and in case we are going to restart, we are going to extend the contract of industrial gas.
On the other hand, there is a reduced charge from the industrial gas during the period, in a short period of time, and that this is done to reduce the cost when Moses Lake are at the present state. Next. The key metrics, we sold 385 metric ton of polysilicon, and the inventory decreased by 151 metric ton. Production came in approximately according to what we had last quarter. Semiconductor production came in a little bit less. The main reason for this is that we've prioritized making Float Zone, which is the high end, but it takes somewhat more capacity to produce this quality. And the very positive thing is that, in fact, we sold 13.8% more silicon gas than we did in the prior quarter. Next.
When we look into the overall market for semiconductor, if you look to the right-hand side, which is basically the forecast for IC or the chips, microchips in the industry. This is from a report, as you see reported there. In January, the industry thought it should be about $380 billion in revenue or in turnover within this area. If you go to April, you see that the forecast was then lower, but in June, the optimism still are increasing, and it is basically now assumed that 2019 will be somewhat like 20 or 2020 will be somewhat like 2019.
It is basically due to the fact that the price of chips has increased while the volume comes down, which shows that there is somewhat lower supply, and the demand is somewhat higher. But, more or less, the market is supposed to be flat compared to 2019 and 2020, but still there is a lot of uncertainty as yet. From our side, we have, as you saw, a relatively strong Q2, and so far in Q3, it seems that the trend is approximately the same.
We see that we don't report the volume, but particularly, the silicon gas is strong, but the strongest part of it is what we call specialty gases, where we are in some of those qualities, we are not able to deliver as much as the demand out in the marketplace. Next. Yes, as you see then, silicon gas, we were at 831, which is in line with what we delivered, except for in Q1. Basically, let's say we are back to the level we normally should be at. And as I said, we see stable demand also so far in Q3. It doesn't mean that we couldn't have any surprises, but so far, Q3 seems to be equivalent to what we have experienced in Q2.
On the positive side, the Chinese market, we have been, let's say, it has been a particular tax on silicon gas into China. China has then reduced this tax from 10% to 7.5%, which is also, let's say, not a significant reduction. And, I also have told you earlier that China is not that important for silicon gases, but, you can see that as a positive, as an indication from the Chinese government. If you go to the next one. We delivered 203 metric ton in Q2, compared to 85 in Q1. But as you see, that the price came down 8.6%. That's mainly a mix issue.
We sold more electronic grade polysilicon compared to, and then less Float Zone, and that's why the price came down compared to Q1. It is not that the market in itself pay less in Q2 than in Q1. We expect that we are going to deliver more in the second half than what we have done or sell more in the second half than in the first half. And there, you can see that the Chinese, in fact, has reduced the particular duty on U.S.-produced polysilicon, semiconductor polysilicon, from 25 to 0 during this, this quarter. It might be looked at as a positive development in the relationship between the two, or more likely, it, it can be looked at that the Chinese needs high quality polysilicon, which is not possible to make in China as of today.
We definitely focus on the high-end Float Zone. We are one out of two companies able to produce this quality, and that's where we basically now focus our production. Particularly also because the power prices in the state of Montana is relatively low during this summertime. Then I hand over to James to go through the numbers.
Good morning. As Tore indicated, I'll review the financial performance for the second quarter of 2020. As Tore described earlier, our the revenues for the second quarter of 2020 increased by $6.3 million- $31 million during the second quarter. This increase is largely a result of the higher sales volumes at the semiconductor segment, and I'll discuss those in a few minutes. Total EBITDA for the quarter was $2.9 million, which compares to EBITDA of $1.0 million during the first quarter. This represents the second straight quarter of positive EBITDA. While we'd like to see it higher, clearly it demonstrates our success in adjusting to a very, very challenging business environment. Within the semiconductor material segment, revenues for the second quarter were $30.7 million, compared to $24.5 million for the first quarter.
Total polysilicon sales within this segment were 323 metric tons, compared to 88 metric tons in the prior quarter. Solar-grade polysilicon sales increased from only 3 metric tons in the first quarter to 119 metric tons in this quarter. The higher mix of solar-grade polysilicon sales had a dramatic impact on the overall average prices, which decreased by some a 139%. Semiconductor-grade polysilicon sales increased from seasonal lows of 85 during the last quarter to 203 metric tons in the current quarter, which is more in line with the long-term averages that we've seen. Average prices for semiconductor sales decreased by 8.6%, but this is due to a mix of products sold, as Tor indicated.
Recall from the first quarter, that there was a high percentage of sales in the highest price Float Zone grades of polysilicon. Overall, however, the underlying prices for any specific grade of polysilicon remain largely unchanged from the prior quarter. Higher silicon gas sales volumes increased by, or silicon gas sales volumes increased by 101 metric tons to 831 metric tons for the quarter, while average prices for silane gas declined by 7.6% compared to the prior quarter. So this is due primarily to a higher percentage of sales into the lower margin PV and the basic flat panel display market segments, while the underlying prices remained relatively unchanged. EBITDA contributed by the semiconductor materials segment was $9.4 million, compared to $8 million in the prior quarter.
This increase in earnings is primarily attributable to the higher sales volumes of silicon gases. Within the solar materials segment, revenues are due to small shipments of small amounts of the remaining inventory from the FBR facility and resulted in revenues of $300,000 for the quarter. The EBITDA loss contributed by the solar materials segment was $2.3 million for the quarter. As you can see, we continue to reduce expenditures as we identify opportunities to save costs. The other elimination segments, it came in at a net cost of $4.1 million for the quarter, which was unchanged compared to the first quarter. Cash balances increased by $1.3 million during the second quarter. Cash outflows from operations were $5.1 million included, and included the EBITDA of $2.99 million.
$900,000 increase in working capital invested, which consisted of a $2.4 million increase in trade receivables due to the higher sales volumes compared to the first quarter. $2.2 million decrease in inventories related to 151 metric tons of polysilicon, and then a $700,000 decrease in payables and other accruals. In addition, the company paid interest of $8 million, which consisted of $1.7 million on long-term leases and $6.3 million on the senior secured bonds. In addition, we received a refund of alternative minimum taxes in the United States of $2.7 million and settled customer rebates of $1.9 million.
We also experienced a $700,000 gain due to the impact of a weaker U.S. dollar on cash deposits denominated in Norwegian kroner. Cash outflows from investing activities were $400,000, which is a result of capital expenditures of $300,000, an increase in restricted cash balances of $300,000, and then these were offset by the receipt of $200,000 associated with equipment, the refund for equipment that was damaged at a customer site. Cash inflows from investing activities were $6.8 million. This included the payment of long-term lease liabilities of $1.4 million, and then the proceeds of $8.3 million for a loan received under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act.
The loan program, which is called the Paycheck Protection Program, provided qualifying businesses with funds to pay up to 8 weeks of payroll costs, and can be used for certain other operating expenses. The program has since been extended from 8 to 24 weeks. The funds under this program have been provided, and we are reporting them in the form of loans. However, they may be fully or partially forgiven when used to pay for qualifying expenses. Forgiveness is basically based upon maintaining employee headcount and salary levels. In total, cash balances increased by $1.3 million- $31.6 million on June thirtieth. Nominal net debt increased by $34.4 million during the quarter to $210.3 million.
The largest increase in the nominal debt is due to the modification of the long-term lease that Tore mentioned earlier. Total leases increased by $24.6 million. The majority of this was $25.8 million, which was associated with the supply of processed gases to the Moses Lake facility. A couple things to point out about the lease is that the existing lease expired at different dates, but the first one being in February of 2021. And next, that expiration included capabilities that we needed, that we need in order to maintain the plant in its current status. The new lease extends the lease period through December of 2028.
The increase in the lease liability for these leases was $25.8 million, which is the driver behind the increase in the net carrying value of the solar segment, which resulted in the $23 million of impairment. Also, this lease contains an option for early termination if the FBR plant is not in operation at December, in December of 2023. If the lease term ended in December of 2023, the increase in the lease liability would only be about $5.5 million, and impairment would have been approximately $4 million. Additionally, the lease payments are approximately $2 million lower on an annual basis than they were under the old lease. So in summary, this lease lowers the cash flow requirements to maintain the Moses Lake facility in its current status.
It ensures that we have the capability to maintain the plant over the long run in a non-operating status, and it maintains the necessary capability to restart the FBR facility over a relatively short period of time, and to acquire plant gases at a favorable cost after it's restarted. The other large increase in nominal debt was due to the CARES Act loans of $8.3 million that I discussed on the previous slide, and then the remaining $1.5 million increase in nominal debt can be attributed to the impact of a weaker U.S. dollar on the indemnification loan, which is denominated in NOK.
Nominal net debt increased by $33.1 million- $178.8 million, due to the increase of $34.4 million in nominal debt that I just discussed, offset by the increase in cash of $1.3 million from the previous slide. Okay. Six. In terms of the contingent liabilities, there's been no substantial change in any of our expectations associated with payment. With respect to the 2012 property tax appeal, an appeals hearing was held on July seventh. The court indicated that it would rule in the normal course, which is expected early in the fourth quarter. This development is within the timeframes we've previously presented. There are no other changes to the indemnification or the tax liability from prior periods. With that, I'll turn it back to Tore to discuss U.S.-China trade relations.
Yes. Thank you, James. Okay, concerning the U.S. trade, there is nothing, let's say, particularly to report. China has not yet implemented its phase one agreement. We have been in continuous discussions with USTR. USTR bring this up in the regular meetings they have with the Chinese. But China, according to what has been reported to us, say basically that we are not yet in breach. This is a two-year agreement, but there is no reason for, let's say, it's implemented yet due to the COVID-19 issue. So, nothing new on this. We all know that the tension between the U.S. and China has or have increased lately due to the coronavirus and the origin of the COVID-19.
So it is very uncertain if we are going to have a resolution or not. It's more uncertain today than it was in the last quarter. Trump administration has been very vocal that if it's not going to be implemented, polysilicon is of strategic importance, and there will be a push to reshore or onshore the value chain to either the U.S. or to countries outside of China. We just saw the announcement that within the semiconductor TSMC, which is the major supplier out of Taiwan, has already then decided to build a huge fab in the U.S. And there is no doubt that, let's say, the clean energy, particularly solar, is of importance in the U.S.
It, Q1 was much stronger than anticipated in, in the U.S., and it continues to be anticipated about 15GW to be installed in the U.S. in 2020. So the Trump administration has basically said that we are very, let's say, positive to reshore this industry if the, there is no agreement with, with China. And likewise, Biden, which might be the, the or which will be the alternative, if Trump will not be reelected. He has also been very clear that made in the U.S. is very important, let's say, in his, his policy. If you then go to the next, the PV market outlook, it has been a lot of focus on the green hydrogen agenda in, in Europe, if you read the, the documents there.
When it comes to, to hydrogen, there is three case or three sorts of hydrogen. You have the green hydrogen, which is based upon sources, renewable sources. You have the blue hydrogen, which is natural gas, where you, let's say, inject, or you, you take out the carbon dioxide and dispose it somewhere. And you have the brown hydrogen, where you basically. And that's where most of the hydrogen coming from today, where you extract it from natural gas, and you just emit the carbon dioxide. Green hydrogen is what is preferred. That means that it has to be a tremendous investment in, in solar and wind in Europe, just to make that hydrogen.
In their, let's say, in the papers, it is about EUR 340 billion in solar and wind investment for the next decade, which should generate 120GW of renewable capacity. So if the, let's say, green hydrogen agenda will be implemented, that will mean that there is a tremendous investment also going to happen in, solar in, in, Europe. At the same time, you see that, the coronavirus, also in Europe, are looking into to reassure or to basically build up again, a manufacturing capacity within solar. More or less, all this capacity, are now moved to China, but definitely the green, agenda also calls for a lot of new employments in, in, Europe.
Just recently, we saw one company now going to invest for some 8 GW of solar cells in Germany. At the same time, we see that carbon footprint seems to be very focused. We have the French model, where solar panels with low carbon footprint as a premium in the market, and South Korea has now implemented the same thing, where carbon footprint will then command somewhat higher prices of solar panels. As you know, Chinese solar panels do not compete on terms of, let's say, carbon footprint, in particular, polysilicon, which is made out of low energy coal in the Xinjiang province, has a very high carbon footprint. The Biden campaign has promised a clean energy revolution, leading to 100% clean energy by 2035.
You might say that seems to be unrealistic, but Trump will definitely support U.S. manufacturing. Biden will definitely support a clean energy revolution in the U.S. So altogether, definitely, there is no doubt that, as the solar will be a very important energy source in the next, decade. Next. And you will then see that this is from the right-hand side, SolarPower Europe. 2020, the market could be between, 76GW -138GW. I think the, the consensus today is about 110-115, but then you might see that within the next four years, more or less, this might almost double, and a very strong growth are expected in 2021 and, onwards. It's not only, the European Union, U.S. will definitely increase.
China seems to be stable, about 40 GW, while also, Asia Pacific and the Middle East, has a strong pull into PV. And the main reason is definitely that the price of PV now are competitive with the alternatives, and in addition, the focus on the climate change, is, spreading around the globe. That means that if you go to the next one, that the polysilicon market may already be in balance in 2021. In my last presentation, last quarter, we expected that to happen in 2022, but the present capacity for polysilicon, support about 150 GW and, it will either be a shortage in the end of 2021 or in 2022, if there is not going to be new investments on this.
To be added here in Xinjiang, where almost all, if you go to the next one, James. Let's say these are the five largest companies, and you see, I have given the names of the five largest in China. They are all either located in Xinjiang province or in Inner Mongolia. Just recently, what two of those companies had a major incident, an explosion, and two of these companies might be out of operation between two and six months. There is nothing tremendous new on this slide. With the position to capitalize the growing PV industry. The FBR reactors now are running very well in Yulin, and we are producing very high quality polysilicon, which now has also been approved by the largest mono wafer company in China.
We are very excited about the quality we are able to do now on these reactors, and as you know, we are making them very high quality, semiconductor-grade polysilicon at a cost, which is half what is possible by the Siemens reactors. If we were to make some investment in Moses Lake, we would target the semiconductor market with FBR in Moses Lake. We have negotiated with our partner in China. We were due to pay $4.7 million in the end of May. We have now agreed that this $4.7 million can be postponed, because of the financial issues we have in our company.
We are having an agreement that we continue to have the same opportunity in January 2021 to increase our ownership from 15% to then 49%. We also have continued support out of Moses Lake to Yulin, and we are just signing a new agreement with Yulin to keep that support for the rest of 2020. They still need a lot of support to be able to meet the technical challenges and targets for the plant. The production in Q2 was 29 metric ton of loaded silane, 1,063 metric ton of FBR, and 19 metric ton of Siemens out of Yulin.
We are running the plant at a low rate because there is basically let's say some issues about what we call the FBR liner supply into China. The FBR liner, which is a very special liner used in these FBR reactors, are manufactured in the U.S., and there is a delay in supply of those liners to China. If you go to the next, on the battery side. Let's say if you look to the right-hand side, this, let's say, the market acceptance scorecard. As you know, there is a lot of rumors about new efficient batteries out there.
If you look to the silicon anode towards the market acceptance scorecard, there is no doubt that one or the, the most, let's say, technical developed technology now is basically to add silicon to the anode side. It just came out yesterday, also in a R&D paper in, in the Holland, where they have now been able to use 100% silicon on the anode side, and by doing that, they increase the efficiency of a battery by some 70%. We are, for the moment, in discussions with three different companies to do a pilot in our facility in Moses Lake. These three companies, they all use silane as the feedstock for their silicon into the anode, and they want to then test out in a large scale their material.
They also claim that they are in negotiation with some of the larger car companies, but these car companies would like to know if the product they are making can be done in a large scale, on a large industrial scale. And to do that, you need large quantities of, of silane. We also have mentioned before that the silane in these quantities, we are talking about 10,000+ metric ton, is not convenient to transport, so a facility like that needs to be then located adjacent to where you are making silane. And let's say silane is only made today in the U.S. know, all the other silane companies are using TCS, which is a different gas, which could not be used for the silicon anode, let's say, development. So we are excited on it.
On the other hand, it will take time, and we all know that, car companies are not, let's say, using new batteries without an extensive testing. So first, it has to be a pilot. Thereafter, it has to be then tested out before it can be used for application in the car industry. Okay, next. So basically, the focus we have, continue to have in REC. First of all, to continue to operate Butte in a safe, stable way. I'm very excited to see that the EBITDA in Moses Lake went up from $8 million- $9.4 million between Q1 and Q2. So it is a very profitable plant, and let's say, it is definitely very important that we continue to operate in a good manner in Butte.
When we look to Moses Lake, we are so far dependent upon a trade resolution with China. It is part of the phase 1 deal, but China has not yet implemented, even though they signed this agreement back in January 2020. On the longer term, we definitely are looking into, let's say, a value chain outside of China, but it will take time to make it. In the U.S., you have enough polysilicon, you have the end market, but you are missing the wafer and cell capacity in the U.S. We continue to look into the divestment of the Butte facility in one way to raise capital.
I have always said that Butte will not be divested if we don't receive an offer which is acceptable, to REC and their shareholders. We have several companies still, looking into it, and we are going to pursue to see if we can get, a decent, offer, and then the board will then take a final decision on what to do. We continue to support the Yulin JV. Let's say, if there is going to be two different markets, one out of China and one production capacity outside of China, REC will be the only company having production facilities in both the segments.
So we maintain our ownership of 15% in Yulin, and I think it's very important for REC, and it's also very important in the way we develop then the technology to be definitely more competitive than the Siemens technology. And we continue the dialogue with several of these silicon anode companies, and hopefully, we will then be able to sign up with a pilot testing in Moses Lake, not too far out, in this year. I think that's it. So then we will hand back to Daniel and potential questions to our release today.
Thank you, Tore. We'll then move into Q&A. And again, if you have a question, please use the chat function on your right-hand side. First question here, when it comes to verifying the Chinese implementation of the phase 1 trade agreements, what are the next steps? Two quarters back in time, you talked about shipping small quantities and see whether a tariff was charged or not. Has this been done, and if so, what is the next step?
Yes, it has been done. We have shipped, or basically what we have, we have entered into contracts with Chinese customers for, l et's say, REC are not producing a lot of solar-grade material. This goes towards solar-grade material, but we have some fallouts out of Butte. We have then agreed to sell it to Chinese customers, but then the Chinese customers go to the local MOFCOM office, and they tell that you have to pay 57% duty on this. So we have tested it several times. We also know that our two other U.S. companies, Hemlock and Wacker, have done the same thing. And then what we do is we go back to USTR, which is the U.S. Trade Representative.
We have had several meetings with USTR, and they then have taken that to the Chinese and said that, "Why don't you implement the agreement?" We are not part of these meetings. These are meetings between USTR and MOFCOM, and according to the report back from USTR, they tell that the Chinese says that the reason why they have not been able to implement is due to the COVID-19. And the second thing is that they are not, still not in breach of the agreement, because this is a two-year agreement. Apparently, there is some volumes there, and, let's say, they might implement it later and still meet the agreement, according to what is told by the USTR. What is the next? We continue to give evidence to USTR. We have meetings with USTR, and USTR says that this is a priority to get this implemented.
Okay, and next question. And you kind of alluded to this on your summary slide, but if you don't see a Chinese implementation of the phase 1 agreement and it would be more preferable to set up a non-Chinese value chain, what would be the timeframe to successfully establish such a value chain?
Let's say polysilicon, we need wafer companies to, let's say, take off our polysilicon. If you look to, let's say, the end market in the U.S. is about 15 GW. To make 15 GW of solar panels, you need about 60,000 metric tons of polysilicon, and that's what we have in total capacity in the U.S. So there is an equivalent between how much polysilicon and what is the end market in the U.S. That means that we need wafer capacity of some 15 GW. According to our knowledge today, there is only 1 GW of capacity of wafers outside of China, and this capacity is mainly in Norway. But you have to then invest for making 14 GW of wafers to cover this. That will take time and will take investments.
We are talking to government agencies in the U.S., t hey are very favorable, but timeline is definitely more than a year out to be able to make this happen. But the shortest period would be to get into China. The idea would be that if we get into China, we still have to make a value chain out of China because we need, i t is not acceptable long term, that all the wafers on this globe is made in China. And I think that is not only realized in the U.S., but also elsewhere around the world. But it will take more than a year to establish that kind of value chain.
Okay, next question here. How are you approaching the opportunities in Europe's manufacturing accelerator initiative within the PV industry? For example, NorSun expanding to 5 GW of wafer and cell. Today, 1 GW and a client of Wacker. So I guess, how are you approaching the opportunities in Europe's manufacturing accelerator initiative?
Let's say, REC today is a U.S. company. I say, I'm the only Norwegian now working in this company. We are considered as a U.S. company, and our main focus today has been in the U.S. We try to follow what's going on in Europe, and definitely it's very interesting. But so far, we have not spent a lot of time in the E.U. We are more following what's happening. But definitely, let's say, when you look to polysilicon, there is a capacity of some 60,000 metric tons of polysilicon in Germany, and it is about 80,000 metric tons in the U.S. So the green initiative in Europe, together with what's going on in the U.S., is definitely very attractive to the future of this company as well. We have not yet spent a lot of time in Europe.
Next question. Given the seeming strategic value in REC, why are shareholders and management not pursuing a recapitalization at current low levels to pay down all the debt?
I think what we have basically, o kay, if you go back to our cash position today, it's about $31 million. There is no doubt that the main argument for divesting Butte will be that that's one source of capital. The second source of capital is definitely to ask the shareholders to recapitalize the company. First of all, what we are working on is to look into the business opportunities for this company. China, access to China is definitely the main source, the main opportunities, but we're also looking into a non-Chinese value chain, and the third is then these battery opportunities.
I think we have to have put that in place before we decide what to do, if we are going to divest Butte and then use the proceeds for, one, reduce our debt, two, to invest for one of these opportunities, or if we are going to ask for more capital from the, the shareholders. But, we are not in a very, let's say, we still have enough cash for, for the foreseeable future. So we are not in a very, let's say, as a time-wise, we have time to, to look into the business opportunities and see how things develops in the market.
Next question. On your last slides, you pointed out that you will continue the dialogue with the silicon anode battery companies for pilot testing, and also allude to perhaps seeing some progress already towards the second half of this year. Can you add some more color to this? Are we talking about startup companies or more established battery makers? And would these types of pilot tests require any capital from our side?
The idea so far has been that we are not going to invest. We have offered these companies to utilize our facility. As you understand, silane is a relatively dangerous and difficult gas to handle, and we have all the permits in our Moses Lake facility. So to do pilot tests outside of such a facility is relatively costly and expensive, and will take time because a lot of permits has to be granted. On the other hand, we have an interest that these pilots are successful, because if silicon anode will be the future of an increased battery efficiency, that will definitely be to the benefit for our activity as well, which will mainly be a producer of silane. So we offer them to be there.
They definitely have to cover all costs with some kind of a margin on top of that. But there is no plan from our side to invest in these companies. It is more to help them to be successful, which has been our business case.
Are we talking about smaller venture companies or more established battery makers?
I would say both.
Okay. So, next question: What is the impact of the cash injection from CARES Act in the second quarter financials?
We received then, let's say, money from the U.S. government through this CARES Act. We treat it as, as James said today, it is considered as a loan in our financials, but we are hopeful that at least some of these will be a grant. The CARES Act was basically to be certain that we continued to employ all our people through this coronavirus pandemic, and did not lay them off. We have met all this. We have not laid off people during this period, so we should qualify that part of it is going to be grant, but probably some of it needs to be paid back, but it is a very favorable terms. So it was a very positive positive contribution to our financials during a very difficult period of time.
Okay, next question. The performance for the Butte, Butte facility's performance this quarter, has it been impacted by any adjustment to the China tariffs?
Now, let's say one of the advantage we have in Butte is that we are less dependent on China in semiconductors. You know, the advanced semiconductor business is still not in China. They have, China has not yet been able to get into the most advanced part of it. So our main market for silicon gas, which is the main contributor to the bottom line, is typically in South Korea, Japan, and Taiwan, in addition to the U.S. On the polysilicon side, where we are a relatively small player, we produce less than 1,000 metric ton out of a market of some 3,000 metric ton. It is positive. You might... But it would not create a lot of new volume, since we are more or less selling all we are able to make.
But, it is interesting to see that China reduced the tariff from polysilicon from 25 to 0. As I said, it might be because they wanted to give some positive signals to the U.S., or it might be that they are short of these qualities, and they need to get these qualities from one of the three U.S. producers of semiconductor polysilicon. I don't expect that to be a major change in Q3, so it's more what's happening, but it doesn't change completely our business as such.
Yes, a follow-up question to that. What's your expectation to, obviously, semiconductor business in China, while China is lowering tariff to 0% and the current strong development and in chip industry, in China is there?
As I said, we, more than our business is outside of time in business. So I don't think this will completely change our business. I think, what we now see for Q3 and onwards is that, hopefully, the market will be stable. But what's going on in China or not on the semiconductor, is at least for REC, not that important. But the global market, as in how people are buying their new flat panels or, other semiconductor, other, electronic is certainly very important. I also said that, we, we report silane, but as a very important, also the new developments of, of new silicon gases.
We have four different new silicon gases we have put into the market, and the demand is very strong on these gases, because first, the competition is limited, and second, these advanced new gases is something the chip makers are using more and more as the chips get more and more complicated. So the silicon gas business seems to be a very, very attractive business, also on the long term for REC.
Yeah. So I keep receiving questions, but I think we'll stick to two more before we wrap up the session. So, Float Zone silicon is one of these high-end products, and the SiC market is driven by, for instance, high power applications like electric cars. What is your expectation to this market? Do you expect your Siemens is reacting with this to change?
Let's say we are more or less running now full all our reactors on Float Zone. On the other hand, Float Zone is very difficult to make. That's why the two companies are able to make it. The reason why we report Float Zone and EG is that when you make Float Zone, some of the material you are making has to be downgraded because what we call outfalls. So there is not too much new capacity. If we were to increase capacity, we will not need to do new investments in. We have not prioritized that for the moment. If we have capital for investments, it will be mainly towards the silicon gas side, where we have a very unique position.
We are more or less running full capacity in Butte, combined between silicon gas, silane, and Float Zone. We don't have a lot of spare capacity, even if the market is growing.
Okay, so final question here. When will you be able to run the Yulin plant at close to full utilization, you think?
There you are into, let's say, due to this coronavirus, as the last time I was in China was in mid-January. Since then, I have not been able to go to China. It seems that, as I said, some of the reasons why we have to full capacity is that we have not been able to obtain enough new liners, which is made in the U.S., into China, and we do not want to run the facility without these liners, because these liners make the very high quality facility. It is difficult for me to have all the knowledge of what's going on in China. I get regular updates, but since I've not been there, I have not detailed knowledge about what is the, what is the plan. But, if I look to the typical schedule for new miners, it will at least take a year until we have enough liner for all the reactors out there.
Okay, very good. I think we have timed it for this location. If you want to follow up on your questions, please reach out to REC's IR contact, Nils Ove Kjerstad . Or if you want to discuss the investment case with me, I'm available for discussions. So I hope you all found the Q2 presentation interesting and insightful, and I wish you all a good day. That concludes our session.