To nearly double its output of polycrystalline silicon as part of a $1.5 billion expansion announced last year, Hemlock, Mich.-based Hemlock Semiconductor Corp has begun production at its new polysilicon facility to begin serving the semiconductor and solar energy industries.

By the end of this year, the new facility will produce approximately 9,000 metric tons of new polysilicon capacity, bringing the company’s annual capacity to approximately 19,000 metric tons – making it what the company believes is the largest single polysilicon facility in the world.

For solar applications, polycrystalline silicon is the key material used to produce solar cells that collect renewable energy from light rays; in addition, polysilicon is used in the production of semiconductor devices, the company reminded.

Hemlock, a joint venture of Dow Corning Corp and Japan-based Shin-Etsu Handotai Co Ltd and Mitsubishi Materials Corp, said delivering polysilicon from the new facility as quickly as possible was essential to meet customer expectations. Hemlock president and CEO Rick Doornbos commented in a statement, “These customers have put a lot of faith in us and the additional quantities of silicon feedstock will enable them to advance solar technology throughout the globe.”

Hemlock said it expects to complete an additional expansion with operations and supply beginning in 2010, which will increase the total capacity from the Hemlock site to 36,000 tons by the end of 2011.

The company reminded that it is continuing its search for a second location to potentially build a new manufacturing facility, and said collaborative efforts with customers are underway that may lead to further expansions as the company expects high demand for its materials to continue.

Commenting on the news, C.J. Muse, semiconductor equipment and display technologies analyst for Lehman Brothers Equity Research asserted in a report today that while the wording of the announcement seems to differ from Hemlock management's official guidance at its February analyst day when they suggested that capacity would grow from 10,000 metric tons in 2007 to 14,500 in 2008 and 17,000 in 2009, “we highlight that the 19,000 metric ton capacity quoted in the press release is the theoretical capacity Hemlock will have by the end of the year and that actual polysilicon output is still on track to total 14,500 in 2008.”

“Therefore, while we may see incremental upside if Hemlock is able to bring incremental capacity online somewhat before schedule, overall output for 2008/2009 is still tracking with guidance,” Muse concluded.

By: DocMemory
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