Gov. Whitmer: Critical local infrastructure investment enables Hemlock Semiconductor growth, strengthens Michigan’s leadership position in the semiconductor supply chain
Wednesday, September 7, 2022
• Local infrastructure upgrades will enable investments to serve increasing demand in the semiconductor industry on the heels of Gov. Whitmer’s Executive Directive supporting CHIPS+ Act funding
• Investment ensures long-term commitment to producing key element in semiconductor supply chain in Michigan
LANSING, Mich. – Governor Gretchen Whitmer today joined the Michigan Economic Development Corporation to announce support of a township infrastructure project that will enable a total capital investment of up to $375 million and the creation of 170 jobs in Thomas Township while strengthening Michigan’s leadership position in the semiconductor supply chain. This support allows Hemlock Semiconductor Operations (HSC) to modernize and expand operations in Michigan and meet the increasing global demand for hyper-pure polysilicon in the semiconductor and solar industries.
“Hemlock Semiconductor’s investments in Michigan will create more good jobs in the Saginaw region and empower us to continue building and leading semiconductor production in our state,” said Governor Gretchen Whitmer. “Thanks to HSC’s continued investment in our state – which spans decades – Michigan will stay at the forefront of high-tech polysilicon production for the critical semiconductor and solar industries. The impact of this investment will be felt around the entire state for decades to come and build on our economic momentum as work to lead the future of this transformational industry right here in Michigan.”
Hemlock Semiconductor Operations, founded in Hemlock in 1961, is one of the longest operating manufacturers of polysilicon in the world and remains the largest producer of high-purity polysilicon in the U.S., while also being the only U.S.-headquartered manufacturer. High-purity polysilicon, as the foundational material used to create semiconductor chips, is essential for all products in the electronic and solar power industries. HSC currently has approximately 1,350 employees at its headquarters in Thomas Township.
Today’s announcement is the result of projects that HSC is considering to serve increasing demand in the semiconductor and solar industries. In order for HSC to construct these new investments, Thomas Township, in coordination with Saginaw Township, must significantly and rapidly expand sanitary sewer capacity in support of the HSC site. The expansions will include the construction of two new lift stations and five miles of sewer mains.
In support of these needed expansions, Thomas Township today received Michigan Strategic Fund approval of a $27 million Strategic Site Readiness Program (SSRP) performance-based grant, ensuring HSC’s expansion in Michigan instead of other states that were considered. The SSRP grant will be funded through the Strategic Outreach and Attraction Reserve (SOAR) Fund.
In total, the HSC projects are estimated to generate a capital investment of up to $375 million and create 170 jobs. These projects will further boost Michigan’s leadership in semiconductor manufacturing and will ensure a strong supply chain for potential additional growth. The projects will also bring high-wage jobs to the Saginaw region with one of the longest operating manufacturers of polysilicon in the world.
“We built our global reputation on the ability to stay at the forefront of high-tech polysilicon production for the critical semiconductor and solar industries,” said Hemlock Semiconductor Operations Chairman and CEO AB Ghosh. “This investment in local infrastructure supports HSC’s ability to improve and expand our operations and helps us remain globally competitive. Today’s announcement proves Michigan is serious about prioritizing the growth of high-tech businesses. We thank Governor Whitmer and the Michigan Economic Development Corporation for ensuring the U.S. leads in crucial, silicon-enabled technologies.”
In addition to enabling HSC’s investments, the township infrastructure upgrades will create additional needed infrastructure capacity in Thomas and Saginaw Townships, resulting in expansion opportunities at the Great Lakes Tech Park, a 244-acre shovel-ready site owned by the Saginaw County Economic Development Corporation. The park was developed by Saginaw Future through Community Development Block Grant funds approved by the Michigan Strategic Fund in 2009.
“Hemlock Semiconductor is one the region’s largest employers and taxpayers and is in an industry that impacts customers around the globe,” said JoAnn Crary, President of Saginaw Future Inc. “We are so pleased with the solutions-based incentive package provided by the state and are excited to move this transformational development forward. We are also thrilled that this investment will increase the site readiness of the Great Lakes Tech Park.”
Taken together, these are transformational projects for Thomas Township and the surrounding region. Thomas Township anticipates approval of a property tax abatement valued at $20.5 million in support of the project. The Saginaw Road Commission has applied for a $650,000 Transportation Economic Development Fund grant from the Michigan Department of Transportation, and Saginaw Township has received a $10 million legislative appropriation to help with the project.
“A development of this magnitude takes many partners working together for success,” said Russ Taylor, Thomas Township Manager. “We are so pleased with the collaborative efforts of our community, Saginaw Township, Saginaw Future and the MEDC to support Hemlock Semiconductor’s continued growth and we look forward to taking this through our local process.”
It is anticipated the influx of jobs will result in spin-off investments and redevelopment opportunities. More than $364 million in new personal income is expected to be generated by the direct, indirect, and induced jobs that this opportunity will create over 10 years. The project will also support small businesses in the community and will help spur demand to redevelop underutilized properties in the community and the state.
“HSC’s investment underscores the strength of the workforce within our state’s high-tech manufacturing workforce and secures a critical win as we continue working to attract long-term, sustainable investments from semiconductor companies around the world. This transformational investment will create good jobs and economic opportunity for Michiganders for years to come,” said MEDC CEO and Michigan Strategic Fund President and Chair Quentin Messer Jr. “We are grateful for the support of our legislative partners in bringing transformational projects like these to communities throughout Michigan. Today’s announcement demonstrates our strong partnerships at the local and regional level and ensures that Michigan’s economic recovery is experienced by all 10 million of our friends and neighbors.”
Today’s announcement comes just a month after President Joe Biden attended a virtual signing event of the state’s CHIPS Act Executive Directive, hosted at HSC’s operations. President Biden was joined virtually by U.S. Senators Debbie Stabenow and Gary Peters, and in person at HSC’s manufacturing facility by Michigan Gov. Gretchen Whitmer and Congressman Dan Kildee as well as Hemlock leadership. The executive directive marks a vital step toward increasing domestic chip production near automakers and other manufacturers helping to spur innovation, reduce inefficiencies and avoid costly delays. By securing a robust semiconductor supply chain in the state – anchored by existing Michigan companies including SK Siltron CSS, KLA and Calumet Electronics along with HSC – Michigan stands to attract long-term, sustainable investments from companies around the world.
Michigan was chosen as the site of this critical signing for its role in semiconductor manufacturing and passionate support for the CHIPS+ Act by Governor Whitmer and Michigan’s delegation.
The President later signed the CHIPS and Science Act, which authorizes a $52 billion federal investment over the next five years in boosting domestic semiconductor manufacturing and provides a 25 percent tax credit for new or expanded facilities that make semiconductors or related equipment. The measure includes $39 billion in grants for new manufacturing, $11 billion for federal semiconductor research programs and workforce development, and $2 billion for Defense Department-related microelectronics activities.
Semiconductor chips are a vital component of many products used by people every day. The global shortage of these chips, exacerbated by the pandemic and supply chain constraints, has impacted people and industries across the country from auto manufacturing to consumer electronics, home appliances, medical devices, agriculture, defense and more. These shortages have resulted in reduced production and in some cases, idled plants, impacting more than 575,000 auto-related American jobs. In 2021, automakers in North America lost an estimated 2.2 million vehicles, equaling over 3,000 days of work.
About Michigan Economic Development Corporation (MEDC)
The Michigan Economic Development Corporation is the state’s marketing arm and lead advocate for business development, job awareness and community development with the focus on growing Michigan’s economy. For more information on the MEDC and our initiatives, visit www.MichiganBusiness.org. For Pure Michigan® tourism information, your trip begins at www.michigan.org. Join the conversation on: Facebook Instagram LinkedIn, and Twitter.
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