Hemlock Semiconductor to Jettison 100 Jobs

Hemlock Semiconductor
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The struggles continue for Hemlock Semiconductor Corp. as the company announces plans to eliminate 100 jobs. The job losses will all take place in Michigan, with the majority taking place in the first quarter of 2018. The company, which employees around 800 full-time employees and 800 full-time contracts, will notify the affected workers “in the next month.”

The Hemlock, Michigan-based Hemlock blames the layoffs on a changing “business environment characterized by international trade disputes, new competition and changes in the energy industry.” Up until 2011, Hemlock was the world’s largest producer of polysilicon, a raw material used for solar energy.

However, trade disputes with China has seen Hemlock’s stronghold on polysilicon wane. In July 2013, the Chinese government slapped the U.S. with a 53.3% import duty on Hemlock’s polysilicon to retaliate for U.S. duties on solar cells.

In September 2013, it added a 6.5% anti-subsidy tariff. Since then, China has closed a loophole for polysilicon imports used to make photovoltaic (PV) products for exports. China is the world’s largest solar polysilicon market. Not surprisingly, Hemlock has since struggled to regain its footing.

These layoffs are not the first signs of trouble to come from the trade disputes with China. In late 2014, Hemlock closed its second production site in Tennessee. The building, which had been under construction for years, was shuttered before it even opened; 50 employees were affected.

Two years before that, Hemlock temporarily laid off 300 employees at its Clarksville, Tennessee site. The move later became permanent.

In both cases, Hemlock said the layoffs were a result of Chinese tariffs on American polysilicon and price pressures.

The path forward for Hemlock remains unclear. The recently announced layoffs might have something to do with the SolarWorld AG’s (OTC:SRWRF) insolvency. SolarWorld owes Hemlock $800.0 million as part of contracts signed when polysilicon costs were much higher.

 

Sources

WARN Notices,” Michigan Workforce Development Agency, October 20, 2017.

Hemlock Semiconductor to lay off 100 workers,” pv magazine, October 19, 2017.

Hemlock to close Tennessee polysilicon site,” pv magazine, December 19, 2014.

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