CLEVELAND, Tenn. (AP) -- Wacker Chemie AG, a German chemical company, announced Thursday that it will build a $1 billion plant with 500 jobs in southeastern Tennessee to produce hyperpure polycrystalline silicon, a product used to make solar panels and semiconductors.
Company executives, Gov. Phil Bredesen and economic development officials said the company has purchased a 550-acre site near the Hiwassee Industrial Park, about 30 miles northeast of Chattanooga.
Wacker Chemie President and CEO Rudolph Staudigl declined to give a timetable for the start of production, saying that will be driven partly by demand for the product. He said construction will take at least two or three years.
Staudigl declined to discuss wages but said workers will be "well paid" and will need special training.
Tennessee Economic and Community Development Commissioner Matt Kisber said his office has been talking to Wacker Chemie executives and competing for the project since 2005.
Staudigl declined to identify any other states that competed for the plant.
Kisber said the state's incentive package for the company will be worth between $75 million and $100 million and will include tax credits and help with infrastructure and job training. Kisber
The Tennessee site was picked because of its size, proximity to a chlorine supplier, OLIN Corp., power from the Tennessee Valley Authority and the transportation infrastructure, a company statement said.
Staudigl described the product as a "gray, shiny looking material like nuggets" -- extracted from sand -- with a property of collecting light that can be transferred into electricity.
He said it is also the "starting material for semiconductors." The company projects increased demand for polysilicon by the solar and semiconductor industries.
Kisber said the plant is similar to the project recently announced by Hemlock Semiconductor Corp. to build a $1.2 billion polysilicon plant in Clarksville in north central Tennessee.
"This announcement further enhances Tennessee's growing reputation as an innovation center in the development and manufacture of clean energy technologies," Bredesen said in a statement.
In early December, Bradley County commissioners approved a $50 million incentives package for what they described as an unnamed international manufacturer that would create at least 500 jobs.
Wacker Chemie is based in Munich, Germany, and is the second-largest producer of hyperpure polycrystalline silicon. It reported last month that its sales reached euro4.3 billion ($5.5 billion) in 2008.