"This is very important," Governor Phil Bredesen said. "We're talking about potentially the largest investment ever in the state of Tennessee, and something that helps put us at the forefront of something that is very important economically to the future, which is solar power."
The new plant will bring 500 jobs to Montgomery County.
Hemlock Semiconductor wants to increase manufacturing by 10 times in the next seven years.
The investment in Clarksville is a key part of that goal.
HSC is a subsidiary of Dow Corning and the world's largest maker of polycrystalline silicon for solar cells and semiconductor chips.
In 1957, Dow Corning began making polycrystalline silicon for use in semiconductors.
Three years later, production began at the Hemlock, Michigan plant.
In 1979, Hemlock Semiconductor formed as a Dow Corning subsidiary and in 2002, the company branched out to solar panel construction.
The Clarksville Hemlock plant will mean the creation of hundreds of highly specialized jobs and the state is giving local Austin Peay University the means to train future workers.
Tennessee will give APSU $6.4 million to start a whole new curriculum.
Construction on the new plant is set to begin as early as 2009.
In addition to the new plant, Hemlock Semiconductor also announced the expansion of its existing facility in Michigan. That is projected to cost $1 billion.