The US already has a foothold in the semiconductor industry, and the White House argues that building a solar supply chain is necessary to sustain and grow that foothold. But industry experts warn that the actions probably won\u2019t incentivize US companies to shift from producing high-margin semiconductor products to less profitable solar materials and that the moves could ultimately increase the price of solar energy.<\/p>\n
\u201cThere have to be some pretty good incentives for companies to divert capacity to [photovoltaic] silicon,\u201d says Mark Thirsk, managing partner at the semiconductor industry research firm Linx Consulting. \u201cThey\u2019re going to be looking for certainty, and the track record of price controls and tariffs has not provided that certainty.\u201d<\/p>\n
Polysilicon is a highly purified form of silicon. The material must be at least 99.9999% pure for most solar applications and even higher purity for the silicon wafers on which computer chips are built.<\/p>\n
More than 80% of the world\u2019s polysilicon is made in China, according to data compiled by the polysilicon industry analyst Johannes Bernreuter<\/a>. Most of that material is used to make solar panels.<\/p>\n In the US, Hemlock Semiconductor produces polysilicon at a plant in Michigan, and Wacker Chemie makes the material in Tennessee. The US accounted for more than 50% of global polysilicon production in 2005, but the country\u2019s share of production had dropped<\/a> below 2% by 2024.<\/p>\n While the raw materials and production processes for solar panels and computer chips are similar, the economics are totally different. Chinese firms succeed in the solar market by making huge quantities of a relatively low-profit-margin material. In the semiconductor industry, volumes are lower and profit margins are higher.<\/p>\n Even more so than for polysilicon production overall, China dominates the conversion of polysilicon chunks into ingots and then wafers for solar panels. In 2022, no companies made solar ingots or wafers in the US. In recent years, Hemlock and Q Cells have built US wafer facilities, but China still leads.<\/p>\n Since the US has little capacity to convert polysilicon into solar wafers, it doesn\u2019t import much polysilicon. In 2025, Bernreuter says, Q Cells imported about 5,400 metric tons of polysilicon from OCI\u2019s plant in Malaysia, but very little polysilicon flowed into the US beyond that.<\/p>\n The final steps of the solar supply chain\u2014turning wafers into solar cells and cells into solar modules\u2014are better represented in the US. It already has enough module manufacturing capacity to serve the domestic market, and cell capacity is expected to hit that milestone in 2027, according to the trade group Solar Energy Industries Association<\/a>.<\/p>\n Bernreuter says imports aren\u2019t weakening the US solar supply chain, so price floors and tariffs probably won\u2019t make a big difference. \u201cThe most important thing would be more wafer capacity that creates demand for polysilicon,\u201d he says.<\/p>\n The story is quite different for computer chips. The US makes meaningful amounts of all the components needed to make semiconductors. The chip industry is also less concentrated geographically than the solar industry is, and components are produced in the US, China, Taiwan, Japan, South Korea, and other countries.<\/p>\n Hemlock and Wacker primarily produce ultra-high-purity polysilicon for the electronics industry because it fetches a higher price. While the US represents only a sliver of total polysilicon production, the two companies make nearly two-thirds of the world\u2019s polysilicon for computer chips, according to Thirsk, the semiconductor industry expert. The US also makes about 10% of the world\u2019s semiconductor wafers.<\/p>\n In public comments submitted in response to the US trade investigation<\/a>, Q cells argues that the threat to the US industry comes from Chinese firms and urges the US not to add tariffs to companies like OCI that make polysilicon outside of China.<\/p>\n OCI adds in a separate comment<\/a> that US companies\u2019 strong position in the computer industry shows that imports of semiconductor-grade polysilicon are not a threat to national security. The firm recommends exempting high-purity polysilicon from tariffs.<\/p>\n The tariffs apply to imports of all grades of polysilicon, regardless of where the material was made.<\/p>\n Thirsk warns that it will be difficult to persuade firms like Hemlock and Wacker to focus more of their business on solar manufacturing. \u201cThey\u2019re going to have to work at a very different price point,\u201d he says.<\/p>\n Ultimately, the tariffs and price floors will probably raise costs for cell and module manufacturers in the US, thus increasing the cost of solar, Thirsk says. He also expects the cost of computer chips to rise.<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/03\/2025-matt.jpg\")
<\/a><\/p>\n