U.S. chipmaker Wolfspeed secures $1.5 billion in funding, including a $750 million government grant, to expand its production capacity and strengthen domestic semiconductor supply chains.
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| EV chipmaker Wolfspeed gets a major boost with a $750 million government grant for its new silicon carbide wafer manufacturing facility in North Carolina. The funding is part of the Chips and Science Act and will help strengthen the U.S. semiconductor industry. Image Courtesy: Wolfspeed |
Washington, USA – October 15, 2024:
EV chipmaker Wolfspeed is set to receive a significant boost from the U.S. government with a $750 million grant for its new silicon carbide wafer manufacturing facility in North Carolina. The Commerce Department's announcement sent Wolfspeed's shares soaring by 10% before the market opened.
The grant, part of the $52.7 billion Chips and Science Act, is contingent on Wolfspeed taking steps to strengthen its financial position. To meet this requirement, the company has secured an additional $750 million in funding from investment firms led by Apollo Global Management, Baupost Group, Fidelity Management & Research Company, and Capital Group.
Wolfspeed, a key supplier to automotive giants like General Motors and Mercedes-Benz, specializes in silicon carbide chips, which are more energy-efficient than traditional silicon chips. These chips are critical for powering electric vehicles, as well as renewable energy systems and artificial intelligence applications.
The government's support for Wolfspeed aligns with broader efforts to strengthen the U.S. semiconductor industry and reduce reliance on foreign manufacturing. The company's new facility in North Carolina is expected to create thousands of jobs and boost the local economy.
While Wolfspeed has faced challenges this year due to a slowdown in the electric vehicle market, the recent funding and government support provide a much-needed shot in the arm. The company's CEO, Gregg Lowe, expressed confidence in the long-term growth prospects and the importance of Wolfspeed to the U.S. economy and national security.
As Wolfspeed continues to expand its operations and invest in new technologies, it is well-positioned to capitalize on the growing demand for high-performance semiconductors in various industries. The company's success will be closely watched as a barometer of the U.S. semiconductor industry's ability to compete on a global scale.