Wolfspeed Inc., a Durham, North Carolina-based manufacturer of silicon carbide materials and power semiconductor devices, has signed a preliminary memorandum of understanding with the United States Department of Commerce to expect up to $750 million in funding under the CHIPS Act. In addition, an investment consortium led by companies such as Apollo agreed to provide an additional $750 million in financing. Together, these investments will support Wolfspeed's long-term growth strategy to drive domestic silicon carbide production to power clean energy systems such as electric vehicles, AI data centers, and battery storage.
Wolfspeed also expects to receive about $1 billion in cash rebates from the advanced manufacturing tax credit under the CHIPS Act. Through these supports, Wolfspeed's total expected capital will reach $2.5 billion to drive the expansion of silicon carbide manufacturing capacity in the United States.
Wolfspeed emphasized the importance of silicon carbide production, a strategy that has been endorsed by several federal agencies. The United States Department of Energy lists silicon carbide as one of 17 "critical materials" that are critical to clean energy technologies and have a high risk of supply chain disruption. At the same time, the United States Department of Commerce believes silicon carbide is critical to national security.
"These support measures will enhance our ability to expand manufacturing capabilities in the United States, accelerate next-generation semiconductor technology innovation, and help us meet the growing global demand for silicon carbide," said Gregg Lowe, CEO of Wolfspeed. "This proposed investment will help us establish our first 200mm silicon carbide manufacturing sites in upstate New York and central North Carolina, solidifying our leadership position in this space while increasing the resilience and competitiveness of the United States supply chain," he added.”
Lowe added that silicon carbide has demonstrated superior energy efficiency in areas such as electric vehicles, e-mobility, solar and wind energy, industrial power applications, and AI data centers. While EVs are still the main driver of silicon carbide applications, the use cases for silicon carbide will continue to expand as other industries begin to face similar power loss, system size, and cost challenges as automakers.
United States Secretary of Commerce Gina · Raimondo said: "Artificial intelligence, electric vehicles and clean energy are key technologies in the 21st century. By investing in companies like Wolfspeed, the Biden-Harris administration is laying the groundwork for United States to make semiconductors for these critical technologies. "The CHIPS Act enables United States to strengthen semiconductor manufacturing capacity, serving both economic and national security and creating jobs and economic opportunities for communities across the country," she added.”
Picture: Wolfspeed receives $750 million in CHIPS Act funding (Source: Reuters)
Senator Chuck · Schumer said: "This multibillion-dollar investment, backed by the CHIPS Act, will accelerate growth in the Mohawk Valley, create hundreds of high-paying jobs, and further solidify upstate New York as a global hub for chip manufacturing."
North Carolina Gov. Roy · Cooper also applauded: "Wolfspeed is a homegrown semiconductor innovator and manufacturer that creates a lot of jobs, and this grant is very important to the state's economy." He further noted, "With the support of the Biden-Harris administration and our quality workforce, North Carolina will continue to attract high-paying jobs."
Senator Ted · Bader said, "North Carolina's leadership in advanced manufacturing is critical to national and economic security. The new Wolfspeed facility in Siller City will bring good-paying jobs and lay the groundwork for the security of the critical semiconductor supply chain in the United States.”
Joseph Jackson, Partner at Apollo, commented: "Wolfspeed is at the forefront of the sustainable mobility transition, ensuring that the company has the ongoing capital backing to complete its expansion plans and solidify its leadership position in the field. He added, "We believe that this strategic investment will not only deliver long-term value, but will also support the key objectives of the CHIPS Act.”
Following milestone achievements expected in the coming years, Wolfspeed will receive proposed funding for its silicon carbide manufacturing expansion plans in the United States, including the world's largest 200mm silicon carbide capacity expansion. In addition to direct funding, Wolfspeed intends to receive a deduction equivalent to 25% of its qualified capital expenditures through tax credits from the United States Treasury, primarily for the construction of the John Palmour silicon carbide manufacturing center in Siller City, North Carolina, and the M-Line West expansion of the Mohawk Valley facility in Utica, New York.
The multi-billion dollar investment will strengthen Wolfspeed's financial position and is expected to drive significant growth through cash flow generation, supporting its long-term profitability goals.
