Wolfspeed, a US-based manufacturer of wide-bandgap semiconductors, is in line to receive up to $1.5bn financing to support its long-term growth and expand production.
The company has signed a non-binding preliminary memorandum of terms (PMT) with the US Department of Commerce to receive up to $750m in proposed direct funding under the CHIPS and Science Act.
The PMT includes certain conditions for funding disbursements which include requiring Wolfspeed to strengthen its balance sheet.
Additionally, a consortium of investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company and Capital Group agreed to offer an additional $750m in new financing to the company.
Wolfspeed also expects to receive an additional $1bn in cash tax refunds from the advanced manufacturing tax credit under the CHIPS and Science Act (section 48D).
Overall, the semiconductor firm may gain access to up to $2.5bn of capital to support silicon carbide manufacturing expansion in the country.
“To reach this milestone under the US 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 US economic and national security interests,” said Wolfspeed CEO Gregg Lowe. “This support galvanises our ability to expand domestic manufacturing, accelerate innovation in next-generation semiconductor technology, and meet the increasing global demand for silicon carbide.”
Wolfspeed expansion details
The proposed government funding will be used for the construction of a new silicon carbide wafer manufacturing facility in Siler City, North Carolina.
Once operational, the new 2-million-square-foot facility will become the largest silicon carbide wafer manufacturing facility in the US ensuring steady domestic supply of the semiconductors.
A portion of the proposed CHIPS investment will be used to support the planned expansion of Wolfspeed’s device manufacturing facility in Marcy, New York.
In total, the projects are estimated to create more than 2,000 manufacturing jobs and 3,000 construction jobs. Both the projects are part of the company’s previously announced more than $6bn capacity expansion plan.
Founded in 1987, Wolfspeed focuses on manufacturing wafers and devices made from silicon carbide.
Silicon carbide is preferred over traditional silicon due to more favourable chemical and material properties.
The silicon carbide devices can power electric vehicles (EVs) and plug-in hybrids.
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