MARCY, N.Y. — Wolfspeed (NYSE: WOLF), which operates a chip fab in Marcy, has signed a non-binding preliminary memorandum of terms (PMT) for up to $750 million in proposed direct federal funding under the 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 $750 million, the company announced in a press release.
Wolfspeed also expects to receive $1 billion in cash-tax refunds from the advanced manufacturing tax credit under the CHIPS act, giving the company access to up to $2.5 billion in expected capital.
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The money supports Wolfspeed’s long-term growth plans and bolsters domestic production of silicon carbide, which is used in the electric vehicle, artificial intelligence, battery storage, and other industries.
“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,” Wolfspeed CEO Gregg Lowe said in the company release. “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 200 mm 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.”
Wolfspeed said it is the largest producer of silicon carbide technology in the world. It opened its Marcy facility in 2022.
“Wolfspeed is leading the pack in bringing semiconductor manufacturing back to America. This major multibillion investment powered by my CHIPS & Science Law will accelerate the ongoing expansion in the Mohawk Valley, helping boost hundreds of good paying jobs and providing long term work for the Marcy fab to succeed well into the future,” U.S. Senate Majority Leader Charles Schumer (D–N.Y.) said in his own release announcing the news. “From electric vehicles to artificial intelligence, so much critical technology relies on the silicon carbide chips that Wolfspeed will manufacture and perfect in the Mohawk Valley. Today’s massive investment will make America’s economy and our national security stronger as Wolfspeed helps us write the next chapter of America’s resurgence as the leader in the semiconductor industry, with the Mohawk Valley as the beating heart.”
The proposed funds, expected to be received upon milestone achievements in the coming years, will enable Wolfspeed to complete its multi-billion-dollar greenfield U.S. capacity-expansion plan. The company also intends to benefit from the U.S. Treasury Department Investment Tax Credit of up to 25 percent of the qualified capital expenditures primarily related to its construction and installation of equipment at The John Palmour Manufacturing Center for Silicon Carbide in Silver City, North Carolina, and completion of the Mohawk Valley Fab M-Line West Expansion in Marcy.
Under the agreement with lenders, Wolfspeed will restructure or refinance some outstanding convertible notes and revise the terms of senior notes. The company did not disclose additional terms.
Headquartered in Durham, North Carolina, Wolfspeed produces silicon carbide used in several industries including electric vehicles, renewable energy, and data connectivity.
