Mid-Michigan semiconductor manufacturer to receive $325M federal grant

Washington — The federal government is awarding up to $325 million to a mid-Michigan company to expand its semiconductor-grade polysilicon manufacturing.

Hemlock Semiconductor will receive the award thanks to funding from the CHIPS and Science Act, one of the Biden administration’s signature pieces of legislation aimed at onshoring advanced technology production and the jobs that come with it.

“This is a big win for team Michigan,” said Gov. Gretchen Whitmer on a Monday press call.

The award, officials and lawmakers said, will boost Michigan’s standing as a crucial part of the domestic semiconductor supply chain and help prevent the kind of disruptions to key industries — like Michigan’s automotive sector — that occurred due to computer chip shortages during the Covid-19 pandemic.

“We know the negative consequences of offshoring chip manufacturing. In 2021, we saw parking lots full of nearly finished Michigan-made cars and trucks awaiting semiconductor chips from Asia,” Whitmer added. “We can't afford to go back to the days when we don't own the supply chain top to bottom, right here in America.”

She continued: “I can't tell you how grateful we are for the partnership with the Biden-Harris administration and our incredible Congressional delegation that's helped us get to this point.”

The expansion site, located in Saginaw County, spotlights a noted electoral bellwether some 15 days before Election Day. The area could play an important role in the presidential election and is also home to a toss-up congressional race. As Saginaw goes, usually so does Michigan.

Polling suggests there is no clear frontrunner in the race for battleground Michigan between Vice President Kamala Harris, the Democratic party's presidential nominee, and GOP nominee Donald Trump.

Senior Biden administration officials, eschewing politics, said the announcement's timing was due to Hemlock recently signing a preliminary agreement with the federal government.

The Commerce Department estimated the project would create over 1,000 temporary construction jobs and about 180 permanent manufacturing jobs. Construction is expected to take place between 2026 and 2028, with the facility reaching full production capacity by late 2028 or early 2029.

Biden administration National Economic Adviser Lael Brainard said the government's up to $325 million award will "catalyze a multiple of that in private investment." Whitmer suggested the additional private sector investment would bring the project total to $800 million.

Hemlock Semiconductor, also known as HSC, was founded in Michigan in 1968. It is one of five companies globally that manufactures polysilicon pure enough for usage in advanced computer chips.

“Nearly every electronic device in the world contains Hemlock semiconductor [grade] hyper-pure polysilicon," Whitmer said. "It's amazing.”

“This is a major economic investment that will help to create hundreds of good-paying new jobs in Saginaw County.” said Democratic U.S. Rep. Dan Kildee of Flint, who represents the area. “Bringing back manufacturing to America will help to secure our supply chains, create good-paying jobs, grow our economy and ensure we make things in Michigan— not China.”

The six-term lawmaker is not seeking reelection himself, though he made sure to give Democrats credit for the announcement. "Thanks to Vice President Harris and Democrats, we are ensuring Michigan leads the way in the manufacturing jobs of the future,” he said.

Political observers like the UVA Center for Politics and The Cook Political Report have rated the race to replace Kildee as a tossup.

"Our leadership is only growing," U.S. Sen. Gary Peters of Bloomfield Township said of Michigan's manufacturing economy. "We're already in the top 10 in the nation when it comes to skilled workforce, and that's only going to continue as a result of this investment and what I'm sure to be other investments in the future."

The Hemlock award is the first from the CHIPS and Science Act in Michigan. There were $39 billion in available funds from legislation for manufacturing incentives, and $36 billion of that funding has now been earmarked for projects, Biden administration officials said on the call.

More:Michigan eyeing major semiconductor development for Genesee Co. site

The Detroit News previously reported that Michigan is contending to land a major, multibillion-dollar semiconductor development project in Genesee County. Officials on the call declined to comment on whether the remaining funds would go toward that project and whether any more announcements were coming before Election Day.

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@GrantSchwab