LANSING — The state's economic development board on Wednesday awarded a $27 million grant to upgrade wastewater treatment infrastructure near Hemlock Semiconductor, a move officials said will help the company spend up to $375 million expanding its facilities and adding up to 170 jobs.
Hemlock, west of Saginaw, is the world's longest-operating manufacturer of polysilicon, which is necessary to make semiconductors and photovoltaic solar panels. The process requires a lot of water, and Thomas Township — in coordination with Saginaw Township — needs to "profoundly and rapidly" expand sanitary sewer capacity to support the company's plans, according to a Michigan Economic Development Corp. memo.
The $27 million for Thomas Township will come from the Strategic Site Readiness Program in the Strategic Outreach and Attraction Reserve Fund, Michigan's new incentives account that was created in late 2021. The transfer will require legislative approval.
"If you go back to the SOAR legislation, it's really for industries that will help continue to transform the Michigan economy. Given all the recent spate of activities at the federal level with the CHIPS Act passage, the semiconductor is certainly one of those," MEDC CEO Quentin Messer Jr., chair of the Michigan Strategic Fund, told reporters. "Also, we're seeing the movement to alternative energy sources. Hemlock's investment and ability to sort of catalyze what they have been doing in their solar operations we viewed, based upon the legislation, as being transformative."
About 30 percent of global electronics requiring a semiconductor chip contain Hemlock polysilicon made in Saginaw County.
Demand for semiconductors is expected to skyrocket as electric vehicles gain market share, with Michigan well-positioned to take advantage of the demand for a domestic EV supply chain, the MEDC memo said.
Hemlock is working closely with Thomas Township and has provided upwards of $1 million for engineering planning and has hired a consultant to study ways the business can more effectively use water and reduce flow. The company is looking to buy an equalization tank to change the discharge variability, allowing the township time to spend $17.8 million on upgrades.
Saginaw Township, with which Thomas Township contracts for wastewater treatment, needs to boost capacity at its plant at a cost of $19.8 million.
"Today's announcement proves that Michigan is serious about prioritizing the growth of high-tech businesses," Hemlock chairman and CEO AB Ghosh said in a statement. Hemlock, which has about 1,350 employees at its headquarters, anticipates finishing the expansion in 2024, said Jeremy Webb, the MEDC's interim managing director for business development projects.
"They have to ramp up ahead of that," he said when asked when they company plans to hire more people. "So they're going to have individuals in place ahead of that timeline and then trickling in thereafter. They have to get individuals trained on the new equipment and all of that. We don't have a definitive timeline of that as the grant is directed toward the township. But that's kind of the framework of what they're dealing with." The additional sewer capacity also could help Saginaw Future Inc., the area's economic development organization, attract businesses to the nearby Great Lakes Tech Park, a 244-acre shovel-ready site. Thomas Township anticipates approving a $20.5 million property tax abatement for Hemlock. Saginaw Township will receive $10 million in the new state budget to improve its wastewater plant. The SOAR fund has $233 million now and, after legislators authorize the latest transfer, will have a balance of $206 million. The fund started with $1 billion and previously was used to secure major EV or other spending from General Motors Co. and Ford Motor Co. Gov. Gretchen Whitmer has asked the Legislature to put at least $500 million into the account. That "would allow the state to remain competitive as we continue to pursue new transformational investments in the coming months," state budget office spokesperson Lauren Leeds said.
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