Wolfspeed announces $750M in proposed funding from CHIPS Act

The U.S. Department of Commerce and Wolfspeed (WOLF) announced they have signed a non-binding preliminary memorandum of terms for up to $750M in proposed direct funding under the CHIPS and Science Act. In addition, a consortium of investment funds led by Apollo (APO), The Baupost Group, Fidelity Management & Research Company and Capital Group have agreed to provide Wolfspeed 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, artificial intelligence data centers, battery storage and more. In addition, Wolfspeed expects to receive $1B of cash tax refunds from the advanced manufacturing tax credit under the CHIPS and Science Act, giving the company, in total, access to up to $2.5B of expected capital to support the expansion of silicon carbide manufacturing in the United States. Wolfspeed CEO, Gregg Lowe, said, “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.” These 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 U.S. capacity expansion plan, which consists of the largest and most advanced 200mm silicon carbide footprint in the world. In addition to the proposed direct funding, Wolfspeed intends to benefit from the U.S. 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.