DuPont has sold its 40.25 per cent stake in the Hemlock Semiconductor joint venture with Corning and Shin-Etsu Handotai to Hemlock for $725 million. The transaction includes DuPont’s trichlorosilane (TCS) manufacturing facility in Midland, Michigan. The factory is located 20 miles north of the Hemlock Semiconductor campus in Saginaw. DuPont inherited the stake during the DowDuPont merger and had considered it noncore. Post the deal, Corning now owns 80.5 per cent of Hemlock. The remaining 19.5 per cent stake is held by Japanese chemical company Shin-Etsu.
Hemlock Semiconductor said the new factory will help it to better control supply and reduce costs by becoming vertically integrated in terms of polysilicon production. TCS, is a key material for the deposition of polysilicon, is used in semiconductors and solar cells. “This acquisition will strengthen our already strong semiconductor position,” said Hemlock Semiconductor CEO Mark Bassett. “It will help accelerate our growth in the solar sector since we’ll be able to offer ultra-pure polysilicon of exceptional quality that reduces the carbon footprint of producing solar panels at a substantially lower cost.”
DuPont has already received pre-tax cash proceeds of $550 million at closing and expects to receive additional pre-tax cash consideration of $175 million over the next 36-months associated with the settlement of an existing supply agreement dispute with Hemlock.
Hemlock’s new lower cost position, coupled with its ability to produce polysilicon sustainably, will enable the company to boost its competitiveness as solar energy purchasers increasingly look for ways to decarbonize their supply chains. The GHG emissions associated with how things are produced and transported can have an appreciable impact on the embodied carbon of any given product. Solar cells are no different in that regard because major components in solar cell technology like polysilicon require energy intensive processes to purify them into solar grade polysilicon.
REGlobal’s View: The move that will help Hemlock Semiconductor cut production costs and control supply while also decarbonize its supply chains.