U.S.-based polysilicon manufacturer Hemlock Semiconductor claimed up to US$793.5 million in damages from SolarWorld’s contract violation. SolarWorld therefore is in crisis of filing Chapter 11.

Hemlock sued Deutsche Solar, a wafer subsidiary of SolarWorld, for defaulting “Take or Pay” contracts, which was related to over 20 million kilos polysilicon supply in total. Hemlock filed with U.S. court on this contract violation in March 2013, and the court preliminarily ruled SolarWorld to pay US$770 million of compensation. Along with the ruling, the U.S. court requested Hemlock to offer its final damage judgment by July 22.

PV Magazine reported that Hemlock claimed outstanding payment totaling US$584 million plus 12% annual interest, going to US$793.5 million in total. This figure is close to SolarWorld’s annual sales of US$839 million in 2015, and is likely to push SolarWorld into bankruptcy.

Nonetheless, Hemlock intend forcing SolarWorld to withdraw its anti-dumping and countervailing charges against Chinese solar imports, which will make U.S. Department of Commerce or the USITC to revoke the high, punitive tariffs. This result could further be a chance to have China lift its tariff barrier against U.S. and European polysilicon imports. 

SolarWorld is ready to take next step against the ruling. PV Magazine cited SolarWorld CEO Frank Asbeck and noted “damages cannot be sought against the SolarWorld parent company in Germany, due to European competition laws,” indicated SolarWorld.