Hey everybody, we're all gonna get solar power!

To this Fool's eye, that seems to be the upshot of Hemlock Semiconductor's announcement last week. Even as parent company Corning (NYSE:GLW) cuts back on capital expenditures, Hemlock is going full-bore to expand production of the raw materials necessary for a global solar future. This manufacturer of polycrystalline silicon for the semiconductor and solar industries plans to invest an initial $1.2 billion to build a new plant in Clarkesville, Tenn. If all goes well, Hemlock could eventually double the plant's original capacity of 10,000 metric tonnes, pushing the investment past $2.4 billion. At the same time, Hemlock will spend $1 billion more to expand production of monosilane gas at a Michigan plant.

Getting up to speed
Hemlock is a bit of a curious beast: A four-way sub-subsidiary owned partly by Corning / Dow Chemical (NYSE:DOW) joint venture Dow Corning, partly by Japan's Shin-Etsu Handotai, and partly by Mitsubishi Materials.

As you may recall, back when oil prices were going nowhere but up, and alt-fuel plays were all the rage, the solar industry found itself in a bit of a pickle. Basically, business was too good: Too much demand for solar panels and too little polysilicon raw material with which to make the panels. As a result, solar firms like SunPower (NASDAQ:SPWRA) and Suntech Power (NYSE:STP) had to scramble to lock in supply contracts with the people who make the poly.

Hemlock aimed to untangle this supply crunch -- and capitalize on swelling demand -- with an ambitious plan to double output of polysilicon earlier this year. This week's twin investment announcements tell us that the company remains committed to the effort even after much of its client base has burst into flames.

What does it mean to you?
As with so many things, it means both risk and opportunity. The collapse in oil prices has taken alt-energy plays down with it. First, ethanol evaporated. Now, it’s solar stock prices taking a tumble -- SunPower down 73% year to date, Solarfun (NASDAQ:SOLF) 86%, Suntech 86%, and First Solar (NASDAQ:FSLR) a relatively benign 47%. If this keeps up much longer, Hemlock may not have any customers left to sell to.

On the other hand, if all we're going through right now is an industry shakeout, then the upshot could be much different. A high-tech pick-and-shovel play at its essence, it should not matter to Hemlock who survives the shakeout -- only that someone lives to buy its products another day.

If that is the way things play out, Hemlock should be sitting in the catbird seat on the other side of this crisis, enjoying economies of scale that should make it a (if not the) low-cost producer of poly. Whoever it winds up selling to, prices should be able to fall considerably -- maybe even far enough that yes, we can all finally get solar power.

Consume more about Hemlock:

Fool contributor Rich Smith does not own shares of, nor is he short, any company named above. Suntech Power Holdings is a Motley Fool Rule Breakers recommendation. Dow is a former Motley Fool Income Investor pick. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.