DAQO New Energy Corp.'s subsidiary, Xinjiang Daqo New Energy, has been involved in a contract dispute lawsuit with Xinjiang Xian'an New Materials and its affiliate, Xinjiang Dengbo New Energy. The plaintiffs, who previously provided silicon core processing services to Xinjiang Daqo, sought to terminate their business cooperation agreement and claimed compensation for economic losses initially totaling RMB1,958.5 million, which was later reduced to RMB742.7 million. In July 2024, a first instance court ruled to terminate the agreement and ordered Xinjiang Daqo to pay RMB3.16 million in losses and attorney fees, rejecting claims for consequential damages. The plaintiffs appealed, and the second instance court vacated the initial verdict, remanding the case for retrial. In September 2025, the retrial court again affirmed the agreement's termination and ordered Xinjiang Daqo to pay RMB3.30 million, once again rejecting claims for consequential damages. The impact of this litigation on Xinjiang Daqo will depend on the final outcome.