Hemlock Semiconductor (Michigan)

Project Summary

The U.S. Department of Commerce awarded Hemlock Semiconductor (HSC) up to $325 million in direct funding to support the construction of a new manufacturing facility on HSC’s existing campus in Hemlock, Michigan, dedicated to the production of hyper-pure semiconductor-grade polysilicon.

Economic and National Security Impact

Polysilicon is the foundational material for microprocessors, artificial intelligence chips, memory, and power devices, and is the physical substance that gives chips their semiconductor properties. The Department's investment in HSC will significantly expand U.S. production capacity of hyper-pure semiconductor grade polysilicon, supporting economic and national security. HSC is the only U.S.-owned manufacturer of hyper-pure polysilicon, and one of just five companies in the world producing it at the purity-level needed for leading-edge semiconductor production.

Workforce and Community Impact

The construction of HSC’s new manufacturing facility is expected to create approximately 180 manufacturing jobs and over 1,000 construction jobs over time.

To recruit, train, and retain the workforce needed for these projects, HSC will implement a robust workforce strategy informed by the Biden-Harris Administration’s Good Jobs Principles. The direct funding award includes up to $5 million in dedicated funds to implement workforce initiatives such as worker recruitment and training. 

To advance its manufacturing workforce efforts:

• HSC is developing local talent by partnering with Delta College and Saginaw Career Complex to support and create programs that connect the local community to training and employment opportunities, including a skilled trades youth apprenticeship public high school co-op program.
• HSC will include and maintain salary ranges by job classification in all job postings.
• HSC will invest at minimum $1.3 million per year for four years into a variety of initiatives, including workforce development programs, wraparound services, local internship programs, and local K-12 STEM programming.

For its construction workforce:

• HSC will, consistent with the statutory requirements of the CHIPS Act, include terms in its construction contracts requiring all construction contractors and subcontractors to comply with the Davis Bacon Act. In addition, the Department of Commerce is building a best-in-class Davis Bacon compliance program to ensure that recipients of CHIPS funding comply with the law.
• HSC has committed to either carry out a project labor agreement or undertake efforts to achieve a registered apprenticeship utilization rate of 15 percent on the construction sites.
• HSC will undertake efforts to expand access and services for construction workers by undertaking efforts to:
  • Maintain or enter into bids from contractors that make financial contributions to Registered Apprenticeship Programs, and encourage partnerships with pre-apprenticeship programs that support individuals without access to or familiarity with such Registered Apprenticeship Programs;
  • Work with contractors to identify and recruit candidates from economically disadvantaged populations; and
  • Work with contractors to provide wraparound services and benefits to employees such as personal protective equipment, health and safety services, safety events, on-site amenities, and housing services.

HSC has committed to work collaboratively with community and strategic partners to create new child care seats, expand affordability for their workers, and strengthen the local child care ecosystem.

Environmental and Worker Safety Commitments

In connection with the CHIPS award, the Department is requiring HSC to continue its commitment to the following environmental responsibility and worker safety measures in its operations. As is required for all CHIPS projects, the HSC projects will comply with all applicable environmental laws, including the Clean Water Act, Clean Air Act, Endangered Species Protection Act, and the Resource Conservation and Recovery Act.

In connection with the CHIPS award, HSC is making the following environmental commitments:

• Greenhouse Gas Emissions Reduction: By the end of 2030, HSC will use energy efficiency initiatives, compliance with renewable energy regulations, and Renewable Energy Credits to reduce greenhouse gas emissions by 30 percent.
• Water Use Reduction: HSC will undertake efforts to implement water conservation and reuse strategies for the project to achieve 20 percent water reuse at the facilities by project completion.
• Public Reporting: HSC will report the environmental responsibility goals it has adopted and disclose annual progress toward those environmental goals, including:
  • energy (kWh) used, saved through conservation programs, and produced from clean energy sources;
  • water used, conserved, and recycled; and
  • total waste generated and percentage total hazardous and nonhazardous waste destined for a landfill, incinerator, recycling facility, or treatment facility.  

HSC has also committed to the following worker safety measures:

• Worker Safety Committee: HSC will maintain a workplace safety committee comprised of workers and management that meets regularly and is authorized to address any worker health and safety concerns.
• Adoption of Most Protective Occupational Exposure Limits: HSC will apply the lowest (i.e., most protective) occupational exposure limit (OEL) among all applicable published health and safety standards (including National Institute for Occupational Safety and Health and American Conference of Governmental Industrial Hygienists standards), for hazardous chemicals used in the facility’s operations.

Financial and Commercial Terms

As stated in the CHIPS Notice of Funding Opportunity for Commercial Fabrication Facilities, CHIPS for America will disburse direct funding to the company for capital expenditures spent on the projects based on the completion of construction, technology, production, and commercial milestones. The CHIPS Program Office will track the performance of each CHIPS Incentives Award via financial and programmatic reports, in accordance with the award terms and conditions.

All CHIPS funding recipients are required to adhere to restrictions pursuant to the CHIPS Act and NOFO regarding stock buybacks and national security guardrails, which limit the sharing of intellectual property. Corning Incorporated, Hemlock’s parent company, retains the ability to engage in stock buybacks, with certain restrictions, consistent with Corning’s agreement with the Department.