Michigan's Hemlock Semiconductor set to get millions in federal money

A Michigan company that makes materials for semiconductors has been tapped to receive up to $325 million in federal funding toward a new facility on its campus west of Saginaw.

The money will come from the 2022 CHIPS and Science Act, which was designed to boost domestic production of semiconductors. The funding will support the production and purification of hyperpure semiconductor-grade polysilicon, a crucial ingredient in advanced chips, according to the announcement. A news release said the company and U.S. Commerce Department "have signed a non-binding preliminary memorandum of terms."

The company, Hemlock Semiconductor, was founded in 1961. A news release noted that it’s “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.”

Officials said the investment would be the first major CHIPS Act money for Michigan and would lead to 1,000 construction jobs and almost 180 manufacturing jobs. The new project would be separate from an expansion announcement in 2022. A release at the time said the company had about 1,350 employees at its headquarters.The CHIPS Act was pushed as a way for the United States to reclaim key aspects of semiconductor production, which had largely moved overseas.

U.S. Commerce Secretary Gina Raimondo touted the impact of funding from the CHIPS Act.

“We’re continuing to build out our capacity, which by the way was almost nonexistent just a few years ago. We are on task to hit our goal of tripling domestic manufacturing capacity in this country, and we now have all five of the world’s leading-edge chip manufacturers expanding in the United States of America,” Raimondo said in a call with reporters Monday with officials, including Gov. Gretchen Whitmer, Sen. Gary Peters, D-Michigan, and U.S. Rep. Dan Kildee, D-Flint Township.

The chip shortage following the pandemic’s initial impacts on the supply chain demonstrated how reliant U.S. manufacturing had become on essential components, especially in high-tech products and automobiles.

“Here in Michigan we saw it firsthand as we would drive by parking lots and see them filled with cars that could not be delivered because they were missing a chip or two. In fact, 11 million vehicles in 2021 were either delayed in production, pulled off production because of a chip shortage and so it’s no wonder we saw increases in prices,“ Peters said.

A senior Biden administration official said construction on the new facility would get underway in 2025 and 2026 with production beginning in 2028.

Hemlock Semiconductor Chairman and CEO AB Ghosh said in the news release that “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.”

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