Trade Tariffs Threaten US Polysilicon Factory

A U.S. factory that Washington aimed to protect as part of its semiconductor supply chain initiative is now at risk of closure. The Charleston, Tennessee facility, which employs approximately 600 workers, could shut down if a decision is made in the coming weeks. This potential closure stems from new U.S. trade measures introduced last month, which were intended to encourage the purchase of American-made polysilicon.

The facility's operator, Germany's Wacker Chemie, stated that it is too early to fully assess the policy's impact but noted that the proclamation, as currently written, does not effectively support the use of U.S.-made polysilicon. The company is reportedly in discussions with the administration about achieving the policy's objectives.

This development is seen as another instance where a Trump administration trade policy may not yield the intended benefits for a targeted industry. It also prompts questions about the administration's ability to shield the U.S. chip supply chain, particularly as Chinese firms expand their influence in the market for refined semiconductor-grade polysilicon.

The trade measures, enacted on August 6, include a price floor and tariffs on imported polysilicon and related products. However, they apply uniformly to products regardless of polysilicon origin, maintaining a disadvantage for more expensive U.S.-made polysilicon. Experts suggest these tariffs, as structured, are unlikely to boost demand for domestic polysilicon.