DuPont Sells Trichlorosilane Assets to Hemlock

14.09.2020 - Dupont has announced the sale of its trichlorosilane (TCS) business and its equity interest in the Hemlock Semiconductor (HSC) joint venture to Hemlock for $725 million. The business, based in Saginaw County, Michigan, USA, produces TCS, which is a key raw material for HSC’s high-purity polysilicon that it supplies to the semiconductor and solar industries.

Regulatory authorities have approved the deal, which closed at signing, giving DuPont pre-tax cash proceeds of $550 million. The additional $175 million is due over the next three years and is associated with the settlement of an existing supply agreement dispute with Hemlock.

In May 2019, DuPont said it might sell its stake in HSC as it had identified it as a non-core business. It did not disclose the size of its stake in HSC, but media reports put it at 40.25%. The other jv partners are Corning and Shin-Etsu.

“This transaction is consistent with our commitment to refine our portfolio and sharpen our focus on growth opportunities where DuPont’s unique innovation capabilities can create greater shareholder value,” said Ed Breen, DuPont executive chairman and CEO. “We have a defined strategy of active portfolio management to further align the company’s resources to deliver higher margins and returns, aligned with our disciplined approach to capital allocation.”

HCS said that by acquiring the TCS operations in Midland, Michigan, which lie about 20 miles from its Saginaw complex, it will be better able to control supply and substantially reduce costs. It added that a new, lower-cost position combined with its ability to produce polysilicon sustainably, will enable the company to boost its competitiveness as solar energy purchasers increasingly look for ways to decarbonize their supply chains.

Describing the deal as “a major milestone” for the company, HSC chairman and CEO Mark Bassett said: “This acquisition will strengthen our already strong semiconductor position. It will help accelerate our growth in the solar sector since we’ll be able to offer ultra-pure polysilicon of exceptional quality that reduces the carbon footprint of producing solar panels at a substantially lower cost.”

Polysilicon is used to make solar photovoltaic (PV) cells and the integrated circuits for electronics, which are used in multiple applications from smartphones to autonomous vehicles.


Author: Elaine Burridge, Freelance Journalist