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CLARKSVILLE, TN (WSMV-AP) -
Hemlock Semiconductor in Montgomery County announced Monday they will be laying off 277 of its 400 workers starting in March.
Citing "significant economic challenges," the company said the layoffs will occur over a two-week period beginning on March 18.
The plant had become one of the biggest construction projects in the state, but the company announced in November they were postponing three of the four phases of their plant project.
Hemlock officials had said the Clarksville facility would eventually employ 500 workers.
The layoffs are "in response to significant oversupply in the polysilicon industry and the threat of potential tariffs on its products sold into China," said Company Spokesman Jarrod Erpelding.
"This is a difficult but necessary decision to enable Hemlock Semiconductor to navigate the volatility in the polysilicon and solar industries," said Andrew Tometich, president of Hemlock Semiconductor in a news release. "The unresolved trade disputes among the U.S., China and Europe are a major factor in Hemlock Semiconductor's actions as the threat of tariffs on U.S. polysilicon imported into China has significantly decreased orders from China, which is home to one of the largest markets for our products."
The $1.2 billion plant near the Kentucky border was scheduled to begin production of polycrystalline silicon. The compound is used in solar energy panels.
Tometich said the plant will be utilized and the company looks forward to production. Asked if the layoffs mean the plant might not open this year, he conceded that is possible.
The company said they are also laying off 100 workers at their facility in Michigan.
"There's no doubt there's a huge disappointment in the state," said Gov. Bill Haslam. "We were hoping for big employment numbers there. The only consolation is that they did make the capital investment they said they would in the state. They themselves have invested north of a billion dollars."
Haslam said there are still hopes the company will build to their original plan when market conditions allow.
"It's a reflection of what's happening in the market," said Haslam. "It's a market that's been overbuilt, and they've reflected that."
During Hemlock's construction, Austin Peay State University even unveiled a Hemlock Semiconductor Building where students could enter a chemical engineering technology program. University officials hope the news about Hemlock doesn't discourage students from entering their program, saying two thirds of the more than 100 students who have studied in the Hemlock Semiconductor Building have actually gone to work for other companies.
"They've learned skill sets that qualify them to pursue jobs in other companies that produce all sorts of things," said Bill Persinger of Austin Peay. "That includes jobs in the oil and gas industry, the coal industry, and power industries such as TVA."
News of Hemlock's troubles come a short while after polysilicon plant Wacker delayed the opening of their Bradley County facility for 18 months. During Gov. Phil Bredesen's time in office, the state offered incentive packages to solar companies. Haslam said he hasn't given up on them.
"I think both Wacker and Hemlock would both say this book isn't finished yet," said Haslam. "We're sitting where we are today where two folks have made really big investments in the state, but the employment and growth hasn't happened."
Copyright WSMV 2013 (Meredith Corporation). All rights reserved. The Associated Press contributed to this report.
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