Wolfspeed, a leader in silicon carbide technology, is set to receive $750 million from the federal government through the CHIPS and Science Act.
This funding is part of a broader effort to increase domestic semiconductor production for key industries, such as electric vehicles (EVs) and artificial intelligence (AI). The funds will support Wolfspeed’s plans to establish a cutting-edge silicon carbide manufacturing facility in Chatham County, North Carolina, and upstate New York.
In addition to the CHIPS Act funds, Wolfspeed has secured another $750 million in financing from investment firms like Apollo and Fidelity. The U.S. government is pushing for increased semiconductor production to bolster national security, as these chips are crucial for emerging technologies such as EVs, AI data centers, and solar energy systems.
Wolfspeed’s stock has responded positively to the news, rising 21% on Tuesday, continuing an upward trend after a difficult year. Despite challenges earlier in 2024, including a summer downturn, the company is now seeing renewed investor confidence, thanks to projected growth in EV and AI-related revenues.
The announcement comes amid broader discussions about the role of government in accelerating EV adoption, a topic that remains politically divisive as the 2024 US elections approach. Wolfspeed’s partnership with major automakers like General Motors and Tesla highlights its growing influence in the EV sector. However, the semiconductor industry as a whole has faced setbacks, including a warning from Tesla in early 2023 about reduced use of silicon carbide technology.
While Wolfspeed’s stock has rebounded this month, with a 42% gain in October, it remains down 68% for the year. Analysts are optimistic about the company’s future, noting that it is in final negotiations to supply 200-millimeter silicon carbide wafers to major clients, further solidifying its position in the chip market.
With input from Axios and Investor’s Business Daily.
