In July, the Trump administration initiated a Sec. 232 investigation into the polysilicon industry. An affirmative Sec. 232 ruling would let the federal authorities impose tariffs on imported merchandise if they’re deemed a risk to nationwide safety. The “purpose” of Sec. 232 tariffs is to restrict imports and increase home manufacturing.
Credit score: Hemlock
The Dept. of Commerce obtained nearly 50 public feedback on the matter, together with from home photo voltaic panel gamers, polysilicon-focused firms and numerous commerce associations. A lot of the commenters had been concerned with the photo voltaic business, though some teams commented on polysilicon’s position within the semiconductor business, together with Tesla.
Commerce was analyzing the demand for polysilicon in america and whether or not home manufacturing can meet such demand. Polysilicon manufacturing in america was basically gutted throughout the China-America trade war of the 2010s. The three principal U.S. polysilicon producers — Hemlock, Wacker and REC Silicon — noticed their market share shrink from $1 billion in 2011 to $107 million in 2018 after China positioned excessive duties on American-made polysilicon. China has since overtaken the worldwide market, now estimated to carry a 93.5% market share.
Hemlock and Wacker are nonetheless producing polysilicon in america, each for the photo voltaic and electronics markets, however REC Silicon has since dropped out. New firm Highland Supplies is making an attempt to start out a polysilicon manufacturing plant in Tennessee. There are additionally a handful of non-China gamers that contribute to the photo voltaic business, together with OCI in Malaysia and Wacker’s German plant. Intertek CEA estimates that there’s solely 92,000 metric tons (mt) of polysilicon capability at the moment operational outdoors of China. In the meantime, China’s operational polysilicon capability reached 3,250,000 mt in 2024.
It’s usually estimated that it takes 2,500 mt of polysilicon to make 1 GW of silicon photo voltaic panels. If america took all 92,000 mt of the non-Chinese language polysilicon provide accessible, that may produce simply 36.8 GW of panels. The USA is averaging a 50-GW photo voltaic demand yearly, exhibiting that not solely can the home polysilicon business not meet the nation’s photo voltaic demand, nor can the whole non-Chinese language provide.
However not simply polysilicon is concerned within the Sec. 232 investigation — the federal government is taking a look at each product that accommodates polysilicon. Not solely might pure polysilicon imports be tariffed, however silicon wafers, photo voltaic cells and panels could possibly be tacked with a further tax too.
One of many commenters, bipartisan group Coalition for a Prosperous America (CPA), advised a variety of tariffs on photo voltaic merchandise below Sec. 232:
- Polysilicon
- Annual tariff-rate quota (TRQ) of 40,000 mt of polysilicon imports for trusted allied international locations with non-Chinese language-controlled provide chains. (That means the primary 40,000 mt of imported polysilicon wouldn’t be tariffed.)
- Out-of-quota imports topic to $10/kg tariff.
- Ingots and Wafers
- TRQ of 30 GW of ingot or wafer imports for trusted international locations.
- Out-of-quota imports topic to 7¢/W tariff.
- Cells
- TRQ of 30 GW for cell imports for trusted international locations.
- Out-of-quota imports topic to 10¢/W tariff.
- Panels
- All imported silicon photo voltaic panels topic to twenty¢/W with no in-quota aid.
A call by the federal authorities was anticipated by yr’s finish. Roth Capital Companions reported in late summer season that PPAs had been already being drawn up with “reopeners” that may permit contracts to be renegotiated based mostly on adjustments to tariffs, as a result of uncertainty across the Sec. 232 investigation.
