Hemlock Semiconductor suing solar company for breach of contract - ABC 12 – WJRT – Flint, MI

Hemlock Semiconductor suing solar company for breach of contract

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(03/08/13) - Just a few short years ago, Hemlock Semiconductor was busy with announcements of new facility construction and adding jobs.

But lately, the talk has been about job layoffs, international trade disputes, and now a big lawsuit.

Hemlock Semiconductor is suing a European solar company for breach of contract, as the turmoil and uncertainty in the solar market shows no sign of easing.

Just three years ago, Vice President Joe Biden came to Hemlock Semiconductor, touting its job creation in the solar industry. Its polycrystalline silicon can be found in a number of products, like solar panels.

The company claims a volatility in the solar polysilicon industry and international trade disputes have led to 400 permanent layoffs -100 at its Thomas Township site.

And now, Hemlock Semiconductor is suing Duestche Solar, one of its customers, for alleged breach of contract. HSC claims Deutsche Solar is not living up to contracts to purchase its products, to the tune of nearly $84 million.

"The contract is calling for larger orders than the market will bear right now," said economist Timothy Nash, of Northwood University.

Nash says international trade disputes and lawsuits are not the only things hurting Hemlock Semicondcutor.

"If you look at the solar technology demand, if you look at the battery technology demand, right now at this time, the market, not just in the United States but globally, has been greatly reduced," he said.

Nash says that's because of the cost of producing that type of energy. In simple terms, he refers to the scene in the move Wall Street, where Michael Douglas' character is walking along a beach with a big cell phone, a cell phone he says cost $15,000 in the 1980's. But now, cell phones are smaller and everywhere, because market competitors made it affordable for everyone. Nash says solar products are not there yet.

"We haven't figured out the best way for the technology to be produced at a cost-effective price, so that the masses of people can afford to buy it," he said.

Going back to the lawsuit, no comment from HSC or Deutsche Solar.

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