Gov. Bill Haslam

Hemlock Semiconductor is laying off three-fourths of its employees in Clarksville, Tenn., shortly before the planned start of production at its new $1.2 billion plant.

Officials of the Michigan-based company said Monday they will cut 300 of the 400 jobs in Clarksville and 100 workers at its Michigan plant.

The layoffs at the Clarksville polysilicon plant were announced three months after competitor Wacker Chemical said it is slowing completion of a similar $1.5 billion plant near Charleston, Tenn. Wacker is delaying the start of production of its new Tennessee plant until mid-2015, 18 months later than originally planned, because of the slowdown in demand for solar-generating panels.

Hemlock announced in 2008 their plans to build the facility in Clarksville and Wacker announced plans to build near Charleston the next year.

After years of construction by Hemlock, officials at the plant near the Kentucky border said last fall they had plans to begin production of polycrystalline silicon in 2013. The compound is used in solar energy panels.

Hemlock President Andrew Tometich said the plant will be utilized, but he said it was unknown whether the plant will open for business at any time in 2013.

Austin Peay State University developed a chemical engineering associate degree program to support the plant and state government put $6.4 million into construction of a campus building with intricate equipment needed to educate students taking the degree program.

Training has included a combination of classroom study and hands-on experience at Hemlock's plant in Hemlock, Mich. During construction of the Clarksville plant, as many as 3,500 workers were at the site.

"There's no doubt there's huge disappointment in the state in the fact that we were hoping for big employment numbers there," said Gov. Bill Haslam on Monday. "The only consoling factor there is they did make the capital investment they said they would make in the state."

The governor said he remains hopeful that both Hemlock and Wacker ultimately will operate their billion-dollar facilities.

"Both Wacker and Hemlock would say this book isn't finished yet," Haslam said.

"The state decided three or four years ago to make a big investment to be a leader in the production in polysilicon, and that market has gotten saturated," Haslam said. "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."