The Biden-Harris administration announced plans to provide $750 million in direct funding to semiconductor developer Wolfspeed to support the company’s new silicon carbide factory in North Carolina and factory in Marcy, New York. Additionally, investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company, and Capital Group plan to provide an additional $750 million to the company. This, combined with a $1 billion advanced manufacturing tax credit, brings the total funding available to Wolfspeed to $2.5 billion, causing its stock to surge by 30%.
Wolfspeed’s use of silicon carbide enables the production of more efficient computer chips used in technologies such as artificial intelligence, electric vehicles, and clean energy. The company’s two new projects are expected to create 2,000 manufacturing jobs as part of a more than $6 billion expansion plan. Commerce Secretary Gina Raimondo emphasized that investments in companies like Wolfspeed are crucial in reigniting U.S. manufacturing of chips that drive important technologies in the 21st century.
The new Wolfspeed facility in Siler City, North Carolina, could be a significant symbol in the upcoming election, as it opened in a swing state county undergoing rapid economic growth due to incentives provided by the Biden-Harris administration. Vice President Kamala Harris is highlighting the administration’s incentives that are boosting factory work, while former President Donald Trump argues that broad tariffs will bring overseas factories to the United States. President Joe Biden has spoken at Wolfspeed to promote his economic agenda and position the U.S. to compete with China, especially in the crucial semiconductor sector.
The Biden administration played a role in shepherding the 2022 CHIPS and Science Act through Congress to address concerns about the U.S. economy’s vulnerability caused by a lack of access to chips made in Asia, particularly due to China’s control over Taiwan, a major chip production hub. The government support is aimed at encouraging additional private investments, a strategy that appears to be successful in the case of Wolfspeed. CEO Gregg Lowe expressed gratitude for the grant and praised the Commerce Department for awarding funds from the CHIPS Act to support the company.
Wolfspeed’s impact extends to preserving the United States’ lead in silicon carbide production, with the country currently producing 70% of the world’s supply. The investments received will help the U.S. maintain its leadership position in the sector as China intensifies its efforts. By securing funding and support from both the government and private investors, Wolfspeed is well-positioned to continue its growth and innovation in semiconductor development, further contributing to the advancement of critical technologies in the 21st century.
