Trump's Chip Supply Chain Protection Policy May Force Closure of Tennessee Polysilicon Plant
nashnova research
A tariff measure meant to protect U.S. semiconductor supply chains failed to distinguish domestic from imported polysilicon — costing Wacker Chemie's Tennessee plant its last two customers and potentially shutting down the very factory the policy was supposed to save.
What happened?
Germany's Wacker Chemie is evaluating whether to close its polysilicon plant in Charleston, Tennessee — a decision expected within weeks.
The plant employs roughly 600 workers and cost $2.5 billion to build. Layoffs had already begun.
The trigger: after the Trump administration's August 6 Section 232 tariff measure took effect, the plant's last two remaining customers walked away.
Why did the policy backfire on a domestic plant?
The measure applies the same rules to all polysilicon regardless of origin — Chinese or American. This means → the price disadvantage of U.S.-made polysilicon was never addressed.
According to Bernreuter Research, American polysilicon can cost up to four times the imported equivalent. In plain terms = the tariff hit everyone equally, but the U.S. product was already four times more expensive — and still is.
Elissa Pierce, analyst at Wood Mackenzie, was blunt: "We do not expect Section 232 tariffs under the current structure to boost demand for U.S. polysilicon."
Who wins and who loses?
Hemlock Semiconductor faces limited impact — its parent company Corning buys its solar-grade polysilicon internally for domestic wafer production. In plain terms = Hemlock makes it, Corning uses it — no outside customers needed.
United Solar Polysilicon, an Oman-based producer with Chinese ties, welcomed the measure. This reflects a paradox: the policy effectively favors lower-cost overseas producers, not the American plants it claims to protect.
Wacker Chemie stated plainly that the announcement, "as currently worded, does not effectively support the use of domestically produced polysilicon."
What comes next?
The Coalition for a Prosperous America is pushing for the December implementation rules to explicitly reward purchases of U.S.-made polysilicon.
Spokesman Nick Iacovella warned: without a clear signal backing domestic polysilicon, "we risk ceding both solar and semiconductor supply chains to China."
Wacker CEO Christian Hartel had already told investors that without real policy support, the company may have "one plant too many." This means → whether the December rules are revised will directly determine the fate of these 600 jobs.
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