24/7 Market News- Wolfspeed to Receive $1.5B, Including $750M in Proposed U.S. CHIPS Act Funding

October 15, 2024

DENVER, Colo., Oct 15, 2024 (247marketnews.com)- Wolfspeed (NYSE: WOLF) reported signing a non-binding preliminary memorandum of terms with the U.S. Department of Commerce, valued up to $750 million in proposed direct funding, under the CHIPS and Science Act.

The Company further reported an additional $750 million in new funding from a consortium of investment funds.

Wolfspeed plans to use these investments to support its 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.

Additionally, Wolfspeed expects to receive $1 billion of cash tax refunds from the CHIPS and Science Act’s (section 48D) advanced manufacturing tax credit.

The Ccompany believes that the up to $2.5 billion of projected capital will support the expansion of its domestic silicon carbide manufacturing, bolster Wolfspeed’s balance sheet, help fuel significant growth through cash generation, and ensure a clear path to profitability.

Gregg Lowe, Wolfspeed’s CEO, commented, “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. It’s not just about growth for Wolfspeed—it’s about driving technological advancement that powers the future.

“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.”

Apollo Partner, Joseph Jackson, added, “We are pleased to expand our investment in Wolfspeed by providing additional capital in support of the company’s build out of its leading silicon carbide capabilities.

“We believe 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. 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.”

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