EXCLUSIVE-US weighs polysilicon price floor, tariffs to counter China in solar and chips

The Trump administration plans to impose tariffs and a price floor on polysilicon products to protect US factories from Chinese competition and bolster domestic chip and solar panel manufacturing.

The Trump administration is preparing to set a price floor and ‌impose ​tariffs on polysilicon and related products, according to four people familiar with the plan, putting a material critical to solar panels and semiconductors at the center of U.S. efforts to compete with China on artificial intelligence and energy.

The decision, expected to come later this month, aims to protect U.S. polysilicon factories owned by Hemlock Semiconductor and Wacker Chemie from growing Chinese ambitions in the chip supply chain. President Donald Trump's year-long national ‌security investigation into polysilicon by the Commerce Department also has major implications for the growing domestic solar manufacturing industry at a time when the U.S. leader has rolled back federal support for renewable energy.

Details of the probe's findings under Section 232 of the Trade Expansion Act of 1962 are being reported for the first time by Reuters, including the Trump administration's plans to pursue a hybrid system combining a minimum import price with tariffs on polysilicon and derivative products, according to the sources familiar with the deliberations, who spoke on condition of anonymity. Shares of Corning, Toyo, T1 Energy and other U.S.-listed ‌solar manufacturers including First Solar rallied following the Reuters report. Corning, already up 5.2% before publication, rose to 10% and closed up 9.4%; First Solar rose to 4.7% from 1.8%; T1 Energy climbed to 9.9% from 4.9%; Canadian Solar advanced to a gain of 5.6% from ‌3%; and Toyo, up about 1% before the story, jumped as high as 5% before ending up 1.7%.

Polysilicon, an ultra-pure form of silicon, sits at the start of the semiconductor and solar manufacturing supply chains. Manufacturers turn silicon wafers into solar cells and then assemble those into panels used in solar projects. Domestic semiconductor manufacturing, a Trump priority, depends on solar because the solar industry's larger demand for polysilicon helps support production of the material required for chips. The chip industry accounts for 2.4% of global polysilicon demand, the Semiconductor Industry Association said.

"They're finding that they actually do need solar," said Rhone Resch, chief strategy officer at Japan's Toyo Co Ltd, which operates a solar panel factory near ⁠Houston and plans to invest $357 ​million in a nearby solar cell facility. Two of the sources said ⁠the Commerce plan will allow importers investing in U.S. wafer and cell production to offset the costs associated with the trade protections. China accounts for roughly 80% of global solar manufacturing capacity.

A White House official would not comment ahead of President Donald Trump's decision. The Commerce Department did not respond to a request for comment. China's Embassy in Washington ⁠criticized the trade investigation.

"China urges the U.S. to stop the Section 232 tariff measures as soon as possible, and properly resolve the concerns of all parties through equal dialogue," a spokesperson said. Under the Cold War-era Section 232 statute, the president can restrict imports deemed a threat to national security after an investigation to confirm ​a threat exists.

Trump has already completed probes and imposed tariffs on autos, steel, aluminum, copper and lumber. He is expected to soon release the findings of similar investigations into imported drones and industrial robots, which would clear the way for tariffs on ⁠those goods. The administration is also continuing work on closely watched probes into semiconductors, pharmaceuticals, critical minerals and wind turbines as it seeks to rebuild its global tariff regime.

U.S. solar manufacturing has expanded since Congress created tax incentives in 2022. Much of that growth, however, has been concentrated in panel assembly, leaving manufacturers dependent on imported wafers and cells, which require longer investment timelines. Several ⁠U.S. ​solar factory owners, including Toyo, Qcells , Corning, Canadian Solar and T1 Energy, have announced or started facilities farther up the solar supply chain in part to meet stringent Made-in-America requirements tied to federal clean energy subsidies.

The trade group Solar Energy Manufacturers for America and a bipartisan group of U.S. lawmakers have argued in comments to the Commerce Department that imports from non-Chinese producers like South Korea's OCI Holdings and Wacker, with factories in Malaysia and Germany, will be needed until domestic polysilicon, wafer and cell production expands. Hemlock, which operates a plant in Michigan, is ⁠a joint venture between Corning and Japan's Shin-Etsu Handotai. Munich-based Wacker runs a factory in Tennessee.

"Without polysilicon, the next steps of the value chain (wafer and chips or wafer and solar cells) are not possible," Wacker said in a statement. Corning declined to comment.

'COLLATERAL DAMAGE' The administration ⁠must walk a fine line between supporting domestic producers and inflating the cost ⁠of chips and solar panels, products in high demand amid the data center boom.

Industry groups representing solar developers and semiconductor buyers have warned the administration that tariffs could raise the cost of solar power plants and increase prices for products including consumer electronics and automobiles. Even some manufacturers are worried about the impact on demand for their products.

"The market might start having projects fall down" if costs become too high, Martin ‌Pochtaruk, CEO of panel maker Heliene, which operates factories ‌in Minnesota, said in an interview. He called the solar industry's role in the chip-focused trade investigation "collateral damage."