What silicon shortage, asks Hemlock

Hemlock, Mich.-based Hemlock Semiconductor today began production at its new polysilicon facility.

The polycrystalline silicon producer says it expects to nearly double its output for both semiconductor and solar energy industries this year.

A joint venture of Dow Corning, Shin-Etsu Handotai Co. and Mitsubishi Materials Corporation, Hemlock already has claim as the world’s leading maker of silicon—the raw material of solar cells.

By year end, the company says the site is expected to produce 9,000 metric tons of silicon, bringing the company’s annual capacity to approximately 19,000 metric tons, making the production facility the “largest single polysilicon facility in the world.”

An additional expansion with operations and supply will begin in 2010 and by the end of 2011, the Michigan-based company anticipates the facility will produce 36,000 tons annually.

In 2005, global silicon production was 26,000 metric tons and came from a small number of producers including Hemlock and MEMC of the U.S., REC and Elkem of Norway, Wacker of Germany and Tokuyama of Japan (see Solar sales spawning silicon shortages).

"Delivering polysilicon from our new facility as quickly as possible was essential to meet our customers' expectations," says Hemlock President and CEO Rick Doornbos. "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."

Last year Hemlock entered a 10-year silicon supply agreement with San Jose, Calif.-based SunPower, with deliveries from this deal slated to begin in 2010 (see SunPower flat on silicon supply deal ).

According to last year’s deal, the silicon is expected support more than two gigawatts of solar cell production by SunPower.

In addition to the Hemlock site, the company says it is continuing the search for a second location to potentially build an additional manufacturing facility.

While the company didn’t specify if the subsequent facility was part of the $1.5 billion expansion, it did note that it is collaborating with customers on expansion efforts as it expexcts high demand for its materials to continue.