A Tennessee factory that Washington had hoped to protect as part of a push to safeguard the U.S. semiconductor supply chain is at risk of closure after the Trump administration's new trade measures drove away its two remaining customers. Germany's Wacker Chemie, which produces polysilicon that goes into chips and solar panels, will make a decision in the coming weeks on whether to close its Charleston, Tennessee, facility, which employs about 600 workers, according to sources familiar with the matter. The move follows a White House proclamation last month that seeks to incentivize purchases of American polysilicon, as reported by Reuters. Wacker shares fell 3.4% on Friday (4 September), reflecting investor concerns about the policy's effectiveness. The customer exodus was triggered by the White House trade announcement issued last month, which was designed to encourage purchases of U.S.-made polysilicon but has produced the opposite effect.
Following publication of the story, Wacker said it had 'no plans to close the Charleston facility' and its shares closed down 2.6% on Friday. The company said it was too soon to assess the policy's impact on its business but noted the proclamation 'does not, as it reads now, effectively support the use of U.S. made polysilicon.' The company also said it was in active discussions with the administration about ways to achieve the policy's goal of protecting domestic producers. Wacker's two German polysilicon plants and the American facility have been struggling with Chinese competition, with the company cutting jobs at the $2.5 billion Charleston plant last year and CEO Christian Hartel warning investors that the company could have 'one plant too many' if the expected trade action was not beneficial. Berenberg analyst Sebastian Bray said Wacker was likely to close one of its three polysilicon plants, but not necessarily the one in Tennessee, with the earliest clarity expected at the company's Capital Markets Day on 17 September.
The trade measures, announced August 6, include a price floor and a tariff on inbound polysilicon ingots, wafers, cells and solar panels, but they apply equally to products made abroad with polysilicon from anywhere, treating Chinese and American-origin materials the same. That maintains the disadvantage for American polysilicon, which can cost four times more according to market research firm Bernreuter Research. 'We don't expect the Section 232 tariffs, as currently structured, to boost demand for U.S. polysilicon,' said Elissa Pierce, a Wood Mackenzie research analyst. The measure was welcomed by foreign rival United Solar Polysilicon, an Oman-based company with China ties. The dilemma represents the latest example of a Trump trade policy failing to help one of the industries it had sought to aid, similar to how steel and aluminum tariffs raised costs for U.S. automakers. A Trump administration official said the government 'continues to engage with industry stakeholders' to inform its strategy on reshoring polysilicon manufacturing.
The Coalition for a Prosperous America argues the implementing rules for the trade measures, which take effect in December, should reward purchases of U.S.-made polysilicon, noting only two companies produce the material domestically. 'Without a clear signal that domestic polysilicon will be the foundation of both the solar and semiconductor supply chains, we risk ceding both to foreign competitors and adversarial nations like China,' said Nick Iacovella, a spokesperson for the group. 'That is a direct national security threat,' he emphasized. The proclamation authorizes Commerce to offer incentives for companies that invest in U.S. polysilicon production, but they must be negotiated on a company-specific basis. Hemlock Semiconductor, the only other U.S. producer, is more insulated from the policy since its owner, Corning, purchases its solar-grade polysilicon to produce wafers domestically.
