The U.S. is backing a Moroccan company that plans to produce a highly purified form of silicon used to make semiconductors and solar panels, as Washington seeks to line up alternatives to China for materials critical to modern technology. 

Sondiale SA, which wants to produce polysilicon at a new $870 million factory in southern Morocco, has secured $4.75 million from the U.S. International Development Finance Corp. for “pre-investment project development work” to support planning and preparation, according to the Washington-based lender.

A U.S. primary contractor will develop the facility to provide high-purity polysilicon to the U.S. and allied nations, a DFC official said in an emailed response to questions. 

The U.S. is intensifying a push to diversify supplies of key tech inputs away from China, which produces more than 90% of polysilicon globally. Beijing this year announced new curbs over resources such as rare earths in retaliation for tariffs and other restrictions during the trade war with the U.S. — highlighting its control over critical parts of the supply chain. 

The markets targeted will include the European Union, Japan, South Korea, Singapore and Malaysia, according to Sondiale’s executive director, Tayeb Amegroud.

He said the company is seeking to raise about $800 million in equity and loan agreements with local and foreign investors and banks, with as much as $550 million potentially coming from the DFC. The DFC declined to comment on future investments.

The facility, which Sondiale intends to open in the city of Tan-Tan in late 2029, targets annual polysilicon output of 30,000 tons. That’s roughly 1% of current global production, according to Amegroud. 

“Morocco’s partners want to diversify the global supply chain,” Amegroud said in a phone interview. “We will use clean energy to power our unit and target mostly chip-makers.” 

A country of 38 million people on the southern shores of the Mediterranean, Morocco is attempting to capitalize on free-trade deals with the U.S., EU and others to attract foreign investment and tackle high youth unemployment that’s fueled recent protests.

Sondiale, an affiliate of Tangier-based GreenPower Morocco, has already secured $100 million in backing from Morocco’s government for what the kingdom considers a strategic investment, Amegroud said. 

The facility will use an “energy-hungry” method to produce polysilicon bars, he added. 

There are plans for a power-purchase agreement with a local private operator to provide 90% of the plant’s electricity via renewable sources, while 10% will come from state-owned power utility ONEE, according to Amegroud.