According to the Oregonian newspaper, Hemlock Semiconductor has filed a law suit against SolarWorld’s subsidiary, Deutsche Solar over alleged failure to honor polysilicon ‘take or pay’ contracts.
The report said that Hemlock Semiconductor filed suit Thursday March 7 in the federal court of Bay City, Michigan, USA. The disputed supply contract discrepancy was said to be valued at US$83 million.
Many PV manufacturers had entered into long-term supply agreements with major polysilicon producers when supply was in short demand 7-8 years ago. Many contracts were ‘take or pay,’ which later caused many PV manufacturers to lose deposits or pay hefty compensation when module demand didn’t match polysilicon contracted shipment volumes and companies were forced to terminate agreements.
The Oregonian claimed that the law suit cited threats made by SolarWorld’s CEO, Frank Asbeck that unless Hemlock agreed to change the supply agreements, he would have placed Deutsche Solar into bankruptcy, avoiding payment liabilities.
It was also claimed that Asbeck threatened to buy back Deutsche Solar from administrators and continue operations free of any claims.
Not cited in the report is the fact that US-based polysilicon producers, such as Hemlock are facing possible tariffs from the Chinese government on imported polysilicon after the US implemented anti-dumping charges last year on China-made solar cells.
SolarWorld initiated and led the anti-dumping campaign in the US and a similar case under investigation at the EU Commission. Both Chinese and European trade war cases have yet to be resolved.