Hemlock Semiconductor Group announced Monday it will lay off approximately 400 employees in Michigan and Tennessee in the coming weeks.

The maker of polycrystalline silicon said the layoffs are in response to significant oversupply in the polysilicon industry and the threat of potential tariffs on its products sold into China. 

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.

Officials with the Hemlock, Mich.-based company said the layoffs will affect approximately 300 employees at Hemlock Semiconductor's Tennessee site and 100 at its Michigan site, as the company evaluates the longer-term impact of these conditions on its business. 

Should market conditions persist, the company said, the layoffs could become permanent.

The announcement comes just a week after Dow Corning stated it would lay off 500 people globally. In November, Dow Chemical announced it would lay off 2,400 worldwide, including the closure of the Automotive Systems Diesel Particulate Filters manufacturing facility in Midland..

"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. "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."

As a result of these decisions, HSC's Michigan site will continue to reduce production to align with current customer demand. 

The Tennessee facility, which is nearly completed with its construction phase, will maintain a minimum workforce focused on safely maintaining the site for eventual production.  Officials said a number of factors will impact the exact timing of the start-up of the facility, including customer demand and resolution of the trade disputes.

"Hemlock Semiconductor has been in business for 52 years and remains a leading player in its industry. As one of the industry leaders we will manage through this period of extreme volatility and uncertainty and will emerge as a group of companies that will remain viable for the long-term," said Tometich. 

Copyright 2013 WNEM (Meredith Corporation).  All rights reserved.