Key facts
- A new 15% tariff will be imposed on imported polysilicon products.
- The tariff is set to take effect on December 4.
- The measure aims to support U.S. semiconductor and solar panel supply chains.
- China criticized the tariff as protectionist and disruptive to trade.
- The U.S. has two primary polysilicon manufacturing facilities.
President Donald Trump has ordered a new 15% tariff on imported products made of polysilicon, a crucial ingredient for semiconductors and solar panels, effective December 4. The move is intended to bolster U.S. manufacturing and supply chain resilience, particularly in areas like artificial intelligence and energy production, and to compete with China.
The executive order aims to ensure the commercial viability of U.S. polysilicon production, which is deemed necessary for national security requirements. Polysilicon, an ultra-pure form of silicon, is vital for semiconductors used in AI processing, data centers, and solar power generation.
U.S. solar factories have previously accused Chinese competitors of engaging in dumping practices by selling cheaper panels on the market, facilitated by subsidies and by relocating manufacturing to avoid U.S. tariffs. China's foreign affairs ministry criticized the new measures, labeling them protectionist and disruptive to normal trade relations between the two countries.
The U.S. currently has two main polysilicon factories: Hemlock Semiconductor in Michigan, a joint venture between Corning and Japan's Shin-Etsu Handotai, and Wacker Chemie's facility in Tennessee. A spokesperson for Corning stated the tariff encourages investment in U.S. capacity and supports long-term competitiveness, while Wacker appreciated the administration's engagement regarding supply chain resilience and defense interests.
The order also establishes minimum import prices for polysilicon and its derivatives, including $21 per kilogram for polysilicon, $100 per kilogram for ingots and wafers, $0.22 per watt for solar cells, and $0.38 per watt for solar modules or panels. Additionally, the commerce department may implement an incentive program for companies investing in polysilicon production facilities.
This action by the Trump administration follows a report of China's significant export surge in July, driven by AI-related products. Analysts suggest that AI and electrification will continue to drive global manufacturing, with China maintaining competitiveness in AI hardware and electric vehicles.