Hemlock Semiconductor Secures US$325 Million to Boost US Polysilicon Production

Hemlock Semiconductor (HSC) is set to enhance its operational capacity in Michigan, US, after the announcement of a preliminary agreement for a US$325 million grant from the Biden administration.

According to a Monday (October 21) press release, the funds will be allocated to HSC as part of the government's broader efforts to strengthen the US semiconductor supply chain under the CHIPS and Science Act .

The multimillion-dollar investment will support the building of a new manufacturing facility at HSC's existing site in Hemlock, Michigan, making it a critical player in the US semiconductor supply chain. The initiative is also poised to boost the state’s economy by creating close to 180 manufacturing jobs and 1,000 construction jobs over time.

The new facility will produce and purify hyper-pure polysilicon, which is key for semiconductor manufacturing.

“Polysilicon is the bedrock of semiconductors,” said US Secretary of Commerce Gina Raimondo.

Founded in 1961, HSC is currently the only US-based manufacturer of hyper-pure polysilicon.

The proposed investment marks the company’s first major expansion in over two decades, and is anticipated to significantly boost its production capabilities as demand for advanced semiconductor technologies increases.

“HSC is proud to be a manufacturing powerhouse for two vital industries of the future — semiconductor and solar,” said HSC Chairman and CEO AB Ghosh in the same announcement.

"Bolstered by the CHIPS Act, we are planning for a once-in-a-generation investment in advanced technologies to continue serving as a top polysilicon supplier to the leading-edge semiconductor market,” he added.

National Economic Advisor Lael Brainard also highlighted the significance of the HSC investment in reinforcing Michigan’s status as a leader in innovation and manufacturing. “Today’s announcement with HSC establishes a critical capability in the supply chain for semiconductors, solar, and AI here in America,” she commented.

The funding includes a commitment of US$5 million to support the development of the local workforce. HSC has established partnerships with educational institutions, including Delta College and the Saginaw Career Complex, to create training programs aimed at preparing workers for careers in semiconductor manufacturing.

HSC is dedicated to promoting sustainability as well, and has collaborated with state authorities to promote low-carbon initiatives geared at reducing emissions associated with polysilicon production.

Overall, the CHIPS and Science Act has earmarked over US$36 billion for semiconductor manufacturing across the country with the intention of generating approximately 125,000 jobs through various initiatives.

The proposed funding reflects the administration’s commitment to revitalizing the US semiconductor industry, which has seen extensive outsourcing over the past few decades.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.