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Hemlock Semiconductor Group joint ventures to invest up to $3.0 billion to expand polysilicon production for the solar and electronics industries Investment includes expansion of Michigan site, addition of new site in Tennessee

 

polycrystalline silicon

Hemlock, Mich. and Clarksville, Tenn. (U.S.A.) — The Hemlock Semiconductor Group, which includes two Dow Corning Corporation joint ventures, Hemlock Semiconductor Group and Hemlock Semiconductor LLC, will invest up to $3.0 billion to expand polycrystalline silicon (polysilicon) production, a key raw material used to manufacture solar cells and semiconductor devices.

This expansion includes an initial investment of $1.2 billion to build a new site in Clarksville, Tennessee, and up to $1 billion to expand current operations in Hemlock, Mich. Combined, the new Clarksville facility and the expanded Hemlock operations may add up to 34,000 metric tons of polysilicon capacity and ultimately as much as $3.0 billion in investments to support the fast-growing solar industry. Construction of both the Michigan expansion and the new Tennessee site will begin immediately.

In total, the Hemlock Semiconductor group has announced investments of up to $4.5 billion in the past five years to increase polysilicon capacity to meet the growing needs of the solar industry. By 2015, the joint ventures will have increased polysilicon manufacturing capacity by up to 10 times over that 10-year span.

“This announcement offers solar industry leaders confidence that polysilicon supply will be available as the solar and electronics industries continue to grow and innovate,” said Rick Doornbos, president and CEO of Hemlock Semiconductor Group. “The exact scale of this investment will be determined by market conditions. Making this investment in today’s volatile economic climate is a testament to both the long-term outlook of the solar industry, as well as Hemlock Semiconductor’s ability to add capacity to meet the needs of customers.”

To execute the Hemlock Semiconductor Group investment, the company’s shareholders formed Hemlock Semiconductor LLC, a new joint venture that will manage the Tennessee site. Hemlock Semiconductor Group will continue to manage the company’s existing Michigan site.

This is the third major expansion announced at the Michigan site in the last five years. In total, Hemlock Semiconductor Group has committed to invest as much as $2.5 billion at the site during this time frame. This latest expansion will add up to 13,000 metric tons of capacity to the site, while creating up to 300 permanent new jobs, as well as keeping more than 800 construction workers busy during the construction. The Michigan expansion is expected to begin supplying polysilicon in 2011.

“Michigan Governor Jennifer M. Granholm, as well as many key state legislators and local government officials worked hard to make Michigan an attractive location for another Hemlock Semiconductor Group expansion,” said Doornbos. “Hemlock, Michigan, has been our home since our inception more than 40 years ago. It reflects the commitment of our talented employees and the support of the region that we’re able to make another large investment at the site,” Doornbos said.

Hemlock Semiconductor LLC’s new production facility will be constructed at the Commerce Park site in Clarksville, Tennessee. Initially, this site will have the capacity to manufacture approximately 10,000 metric tons of polysilicon, with the ability to expand production up to 21,000 metric tons. Upon completion of the initial investment, the Clarksville site is expected to employ more than 500 people, and will employ up to 800 when expanded. Construction of the site will employ 1,000 construction workers during the next five to seven years.

“We’ve been searching for a location for a new polysilicon facility for some time, as a second site assures a stable, secure supply of polysilicon,” said Doornbos. “Governor Bredesen, working alongside a bipartisan team of state and local officials worked hard to assure that our business needs were met. Tennessee’s business climate coupled with a superb site in Clarksville, a strong, productive workforce and an excellent location in proximity to our supply chain made this the right decision.”

Most of the polysilicon produced by the new facilities will be consumed by firms in the solar industry; however, both sites will have the capability to manufacture ultra-pure silicon for the electronics industry as well as solar-grade material. In solar applications, polycrystalline silicon is the cornerstone material used to produce solar cells that harvest renewable energy from sunlight.

In June 2008, Hemlock Semiconductor Corporation announced the start-up of 9,000 metric tons of capacity at its newest polysilicon facility located at the company’s Hemlock site. That expansion was part of a $500 million phased investment announced in 2005 and 2006. Hemlock Semiconductor Corporation’s annual capacity will be approximately 19,000 metric tons by the end of 2008, and the Hemlock Semiconductor Group plans to bring up to 10,000 metric tons of capacity online each year until the completion of these announced expansions.

Hemlock Semiconductor Corporation and Hemlock Semiconductor LLC are joint ventures of Dow Corning Corporation and two Japan-based firms, Shin-Etsu Handotai Co., Ltd. and Mitsubishi Materials Corporation.

About Hemlock Semiconductor

Hemlock Semiconductor Corporation is a leading provider of polycrystalline silicon and other silicon-based products used in the manufacturing of semiconductors devices and passive solar cells and modules. Headquartered in Hemlock, Mich., Hemlock Semiconductor Group has been providing ultra-high purity polysilicon to customers for over 45 years.

Hemlock Semiconductor LLC is a newly formed joint-venture among Dow Corning Corporation, Shin-Etsu Handotai, and Mitsubishi Materials Corporation. Hemlock Semiconductor LLC plans to construct and operate a state-of –the-art facility to produce polycrystalline silicon in Clarksville, Tennessee.

About Dow Corning

Dow Corning Corporation provides performance-enhancing solutions to serve the diverse needs of more than 25,000 customers worldwide. A global leader in silicones, silicon-based technology and innovation, Dow Corning offers more than 7,000 products and services via the company’s DOW CORNING® and XIAMETER® brands. Dow Corning is a joint venture equally owned by The Dow Chemical Company and Corning, Incorporated. More than half of Dow Corning’s annual sales are outside the United States.

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