News: Microelectronics
15 October 2024
Wolfspeed announces $750m in proposed funding from US CHIPS Act plus $750m from investment group
The US Department of Commerce and Wolfspeed Inc of Durham, NC, USA — which makes silicon carbide (SiC) materials and power semiconductor devices — have signed a non-binding preliminary memorandum of terms (PMT) for up to $750m in proposed direct funding under the US 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 an additional $750m of new financing. Together these investments 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, and battery storage. In addition, Wolfspeed expects to receive $1bn of cash tax refunds from the advanced manufacturing tax credit under the CHIPS and Science Act (section 48D), giving the company, in total, access to up to $2.5bn of expected capital to support the expansion of silicon carbide manufacturing in the USA.
Wolfspeed notes that the importance of bolstering the domestic production of silicon carbide has been recognized across multiple US federal agencies; the Department of Energy denoted it as one of 17 ‘critical materials’ with a high risk of supply disruption that are integral to clean energy technologies, while the Department of Commerce recognizes it as important to national security.
“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,” says CEO Gregg Lowe. “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 US supply chain,” he adds.
“Silicon carbide is already enabling superior energy efficiency across mission-critical industries of the future like electric vehicles, e-mobility, solar and wind energy, industrial power applications, and AI data centers. While EVs have been the driver of silicon carbide adoption thus far, we believe the use cases for our technology are expansive and will only continue to grow as more and more industries find themselves needing to solve for the same power loss, system size and system cost challenges as automakers,” Lowe concludes.
“Artificial intelligence, electric vehicles, and clean energy are all technologies that will define the 21st century, and thanks to proposed investments in companies like Wolfspeed, the Biden-Harris Administration is taking a meaningful step towards reigniting US manufacturing of the chips that underpin these important technologies,” says US Secretary of Commerce Gina Raimondo. “Because of the Biden-Harris Administration’s CHIPS and Science Act, the United States is building and fortifying our semiconductor manufacturing capabilities to serve our economic and national security interests while creating jobs and economic opportunities for communities across the country,” she adds.
“This major multi-billion dollar investment powered by my CHIPS & Science Law will accelerate the ongoing expansion in the Mohawk Valley, helping speed up hiring of hundreds of new good-paying jobs that Wolfspeed is creating in the Mohawk Valley and providing long-term work for the Marcy fab to succeed well into the future, further establishing Upstate NY as a global hub for chip manufacturing,” reckons Senator Chuck Schumer.
“Wolfspeed is a homegrown semiconductor innovator and manufacturer creating great jobs in North Carolina, and it’s important they received this major grant under the CHIPS and Science Act,” says North Carolina Governor Roy Cooper. “Thanks to this landmark legislation from the Biden-Harris Administration and our great workforce, we will continue to see good paying jobs coming to North Carolina,” he adds.
“North Carolina continues to be a leader in cutting-edge manufacturing that is vital to our country’s national and economic security,” says Senator Ted Budd. “This new Wolfspeed site in Siler City will bring good-paying jobs to the area and is an important first step in making sure America has secure supply chains for critical semi-conductors,” he adds.
“Wolfspeed is at the forefront of a critical transformation in sustainable transportation, and ensuring that the company has durable capital access to complete its expansion plans will help solidify its leadership in this space,” comments Apollo partner Joseph Jackson. “Along with our lending consortium, which includes multiple funds that also own substantial equity stakes in the company, we believe this strategic investment will drive significant long-term value while advancing key tenets of the CHIPS and Science Act.”
The 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 world’s largest 200mm silicon carbide footprint. 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, NC and completion of the Mohawk Valley Fab M-Line West Expansion in Utica, NY.
The multi-billion-dollar investment will bolster Wolfspeed’s balance sheet and is expected to help to fuel significant growth through cash generation and accelerate its long-term profitability goals.
Wolfspeed’s Mohawk Valley 200mm SiC fab reaches 20% utilization
Wolfspeed orders multiple Aixtron G10-SiC systems to support ramp-up of 200mm epi production
Wolfspeed tops out construction of John Palmour Manufacturing Center for Silicon Carbide
