Hemlock to close Tennessee polysilicon site

Hemlock Semiconductor has announced that it will begin the process of closing its polysilicon facility in the U.S. state of Tennessee, while providing most of the site’s 50 employees the opportunity to transfer to another location.

Majority owner Dow Corning projects that it will recognize US$500 million in charges to close the plant during the fourth quarter. However, it is only the latest bad news for the site, which had the capacity to produce ten thousand metric tons of polysilicon annually but was never put online.

Nearly two years ago Hemlock temporarily laid off three hundred workers at the Clarksville site, a move which later became permanent. In both cases, the company cited ongoing price pressures and Chinese tariffs on U.S. polysilicon.

In January 2013 the tariffs were only a threat, however since that time they have become real. In July 2013 China imposed a 53.3% preliminary anti-dumping tariff on Hemlock’s polysilicon, and in September 2013 added a 6.5% anti-subsidy tariff. Additionally, the nation is closing a loophole for polysilicon imports used to make PV products for export at the end of 2014.

Chinese tariffs on polysilicon are widely viewed as a retaliatory measure against U.S. and EU trade rulings against Chinese solar imports. Hemlock announced the closure of the site the day after U.S. trade authorities announced increased tariff rates on Chinese solar imports.

Additionally, rival polysilicon maker Wacker Chemie will not be subject to Chinese import duties, as it negotiated a price settlement directly with the Chinese government. The structure of the deal is similar to the negotiated settlement between the EU and China over solar imports.

In a press statement, Hemlock noted that it will continue to produce polysilicon from its site in the U.S. state of Michigan, which has been operating for more than 53 years.