Wolfspeed bags CHIPS Act support for US expansion
The U.S. Department of Commerce and Wolfspeed have signed a non-binding preliminary memorandum of terms (PMT) for up to USD 750 million in proposed direct funding under the CHIPS and Science Act.
In addition, a consortium of investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company and Capital Group have agreed to provide Wolfspeed an additional USD 750 million of new financing.
Together these investments aim to support Wolfspeed’s long-term growth plans and bolster domestic production of silicon carbide to power clean energy systems underpinning electric vehicles (EVs), artificial intelligence (AI) data centers, battery storage and more.
In addition, Wolfspeed expects to receive USD 1 billion of cash tax refunds from the advanced manufacturing tax credit under the CHIPS and Science Act, giving the company, in total, access to up to USD 2.5 billion of expected capital to support the expansion of silicon carbide manufacturing in the United States.
“To reach this milestone under the U.S. CHIPS and Science Act is an incredible achievement in Wolfspeed’s long-term growth strategy, and we believe today’s announcement is a testament to the market-leading quality of Wolfspeed products and significance of Wolfspeed to broader U.S. economic and national security interests. This support galvanizes our ability to expand domestic manufacturing, accelerate innovation in next-generation semiconductor technology, and meet the increasing global demand for silicon carbide. As a key player in the semiconductor industry, this proposed investment will enable us to solidify our leadership position with a first-of-its-kind 200mm silicon carbide manufacturing footprint in upstate New York and central North Carolina, while contributing to the resilience and competitiveness of the U.S. supply chain," says Wolfspeed CEO, Gregg Lowe, in a press release.
These proposed funds, which are expected to be received upon milestone achievements in the coming years, would enable Wolfspeed to complete its multi-billion-dollar greenfield US capacity expansion plan, which consists of the largest and most advanced 200mm SiC footprint in the world. In addition to the proposed direct funding, Wolfspeed intends to benefit from the US Treasury Department Investment Tax Credit of up to 25% of the qualified capital expenditures primarily related to its construction and installation of equipment at The John Palmour Manufacturing Center for Silicon Carbide in Siler City, North Carolina and completion of the Mohawk Valley Fab M-Line West Expansion in Utica, New York.
This multi-billion-dollar investment will bolster Wolfspeed’s balance sheet and will help to fuel significant growth through cash generation and accelerate its long-term profitability goals.
