Wolfspeed, a U.S.-based chipmaker, is set to receive $750 million in government grants for its silicon carbide wafer manufacturing plant in North Carolina, the U.S. Commerce Department announced on Tuesday. The news sent Wolfspeed’s shares surging by over 30%. This preliminary funding agreement is part of the government’s efforts to bolster domestic semiconductor production under the $52.7 billion Chips and Science Act.
The grant requires Wolfspeed to take additional steps to strengthen its balance sheet. “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,” said Gregg Lowe, Wolfspeed’s CEO.
Wolfspeed will also receive $750 million in financing from investment firms including Apollo Global Management and Fidelity. The company, which counts General Motors and Mercedes-Benz among its customers, produces silicon carbide chips that offer greater energy efficiency than traditional silicon chips. These chips are used in electric vehicles (EVs), renewable energy systems, and industrial applications.
The company plans to expand its wafer production in New York and boost its production capacity by 30% as part of a broader $6 billion capacity expansion plan. Wolfspeed expects to start delivering wafers from its new North Carolina facility by summer 2025. The government award, subject to due diligence, reflects the growing importance of semiconductor technology to U.S. economic and national security.
