Biden-Harris Administration announce preliminary terms with Hemlock Semiconductor to expand U.S. Production of semiconductor-grade polysilicon

Today, the Biden-Harris Administration announced that the U.S. Department of Commerce and Hemlock Semiconductor (HSC) have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $325 million in proposed direct funding under the CHIPS and Science Act to solidify U.S. leadership in semiconductor-grade polysilicon production. President Biden and Vice President Harris signed the bipartisan CHIPS and Science Act to usher in a new era of semiconductor manufacturing in the United States, bringing with it a revitalized domestic supply chain, good-paying jobs, and investments in the industries of the future. The proposed funding would support the construction of a new manufacturing facility on HSC’s existing campus in Hemlock, Michigan, dedicated to the production and purification of hyper-pure semiconductor-grade polysilicon. The proposed project is estimated to create nearly 180 manufacturing jobs and over 1,000 construction jobs over time.

“Polysilicon is the bedrock of semiconductors, and it’s important we have a reliable source of this material to manufacture the chips that help support our economic and national security,” said U.S. Secretary of Commerce Gina Raimondo. “Because of the Biden-Harris Administration’s CHIPS and Science Act, we are proposing to invest up and down the semiconductor supply chain and support domestic materials suppliers, like HSC, that are helping drive America’s semiconductor manufacturing resurgence and technological leadership – and creating quality jobs all over the country in the process.”

Founded in 1961, HSC is the only U.S.-based manufacturer of hyper-pure polysilicon and is one of just five companies in the world producing polysilicon to the purity level needed to serve the leading-edge semiconductor market. Polysilicon is the foundational material for microprocessors, artificial intelligence chips, memory, and power devices. In fact, polysilicon is the physical substance that gives chips their semiconductor properties. With this proposed CHIPS investment, HSC would increase its production capacity of hyper-pure semiconductor-grade polysilicon to serve leading-edge chip applications, in addition to the broader semiconductor ecosystem, and bolster U.S. national, economic, and energy security – areas HSC has supported for decades. This proposed funding would be the first significant investment in HSC’s semiconductor capacity in more than two decades.

“President Biden and Vice President Harris are committed to Michigan’s leadership in innovation and manufacturing,” said National Economic Advisor Lael Brainard. “Today’s announcement with HSC establishes a critical capability in the supply chain for semiconductors, solar, and AI here in America.”

“Polysilicon is vital to the semiconductor research and development that will drive America’s technological future and leadership,” said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie E. Locascio. “Today’s proposed investment with HSC would be a meaningful step towards strengthening our domestic materials manufacturers who can in turn bolster America’s entire semiconductor industry.”

The proposed direct funding includes $5 million to support the development of the company’s production and construction workforce. Building on its decades-long presence in Michigan to build a skilled and robust local workforce, HSC has partnered with Delta College and Saginaw Career Complex to support and create programs that connect the local community to semiconductor training and employment opportunities. On the child care front, HSC is also one of 139 employers in Michigan to participate in the Michigan Tri-Share initiative—a child care cost-sharing program where employees, employers, and the state of Michigan each pay a third of the cost of care for eligible individuals. In addition, HSC has made a commitment to work collaboratively with community and strategic partners to create new child care seats, expand affordability for their workers, and strengthen the local child care ecosystem.

“HSC is proud to be a manufacturing powerhouse for two vital industries of the future—semiconductor and solar. 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,” said HSC Chairman and CEO AB Ghosh. “Our customers want high quality and sustainably made polysilicon. This proposed investment demonstrates that the Biden-Harris Administration, Governor Whitmer and our Michigan congressional champions understand HSC’s unique ability to meet those demands and our crucial role in strengthening American interests. As the United States works to reshore critical supply chains, we hope to make additional investments.”

HSC is also known for its commitment to sustainability. Recently, HSC has directly collaborated with the Michigan Department of Environment, Great Lakes, and Energy (EGLE) and Governor Gretchen Whitmer’s Council on Climate Solutions to help guide Michigan into a low-carbon future. As a provider of ultra low-carbon polysilicon to the semiconductor and solar industries, HSC continues to accelerate reductions in emissions and greenhouse gasses across the semiconductor and solar supply chains.

As explained in its first Notice of Funding Opportunity, the Department of Commerce may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After a PMT is signed, the Department of Commerce begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant. The terms contained in any final award documents may differ from the terms of the PMT being announced today.