* Tariff and price floors target supply chains dominated by
China
* US solar manufacturers praise action as support for
domestic production and investment
* Implementation delayed until December 4
(Adds reactions from industries, quote from proclamation,
background)
By Nichola Groom and Alexandra Alper
WASHINGTON, Aug 6 (Reuters) - The White House on Thursday
imposed a series of price floors and a 15% tariff on products
made from polysilicon, the raw material used in semiconductors
and solar panels that is primarily produced by China.
U.S. President Donald Trump's proclamation under Section 232
of the Trade Expansion Act of 1962 is aimed at supporting
domestic chip and solar supply chains needed to compete with
Beijing on artificial intelligence and energy.
"The plan of action in this proclamation will, among other
things, help ensure the commercial viability of United States
production of polysilicon and its derivatives that is necessary
to meet United States economic and national security
requirements," the order said.
Polysilicon, an ultra-pure form of silicon, sits at the
start of the semiconductor and solar manufacturing supply
chains. Manufacturers turn silicon wafers into solar cells and
then assemble those into panels used in solar projects.
American solar factories for the last decade have accused
their Chinese rivals of dumping solar panels in the market,
receiving unfair government subsidies and moving their
manufacturing to other countries to dodge U.S. tariffs.
The United States has two polysilicon factories. Hemlock
Semiconductor, which operates a plant in Michigan, is a joint
venture between Corning and Japan's Shin-Etsu Handotai
. Munich-based Wacker Chemie runs a factory in
Tennessee.
"Today's decision encourages continued investment in U.S.
capacity and supports long-term U.S. competitiveness," a Corning
spokesperson said.
Wacker said it was reviewing the actions to fully understand
their impact.
"We appreciate the Administration's continued engagement on
the issue given the ramifications for semiconductor supply chain
resilience, advanced computing infrastructure, and broader U.S.
defense and security interests," the company said in a
statement.
Domestic semiconductor manufacturing depends on solar
because the solar industry's larger demand for polysilicon helps
support production of the material required for chips. The chip
industry accounts for 2.4% of global polysilicon demand,
according to the Semiconductor Industry Association.
U.S. solar manufacturing has expanded since Congress
created tax incentives in 2022. Much of that growth, however,
has been concentrated in panel assembly, leaving manufacturers
dependent on imported wafers and cells, which require longer
investment timelines.
Companies with U.S. solar factories, including T1 Energy ( TE )
, First Solar ( FSLR ) and Qcells, the U.S. solar arm of
South Korea's Hanwha, applauded Trump's move.
"This is a decisive win for advanced American manufacturing
and investment in domestic energy supply chains," Dan Barcelo,
CEO of T1 Energy ( TE ), said in a statement. In addition to its Texas
solar panel plant, T1 is investing $510 million in a cell
factory.
The trade protections will take effect on December 4, the
White House said.
Tim Brightbill, a trade attorney with Wiley Rein who has
brought several trade cases against Chinese solar companies,
warned that the delayed implementation could lead to a surge of
imports in the coming months.
Companies that buy solar panels have argued that the delay
is needed to adjust supply contracts to higher prices.
According to a White House document, the president set
minimum import prices of $21 per kilogram for polysilicon, $100
per kilogram for polysilicon ingots and wafers, $0.22 per watt
for solar cells and $0.38 per watt for solar modules, or panels.
The proclamation also authorizes the Commerce Department to
create an incentive program for companies that invest in
factories to produce polysilicon or derivative products.
The administration's plan to pursue a hybrid system
combining a minimum import price with tariffs was first reported
by Reuters.