The Biden-Harris administration on Tuesday announced plans to provide up to $750 million in direct funding to semiconductor developer and manufacturer Wolfspeed. The funds will be used to support the company’s new silicon carbide plant in North Carolina and facility in Marcy, New York, which will make wafers used in advanced computer chips.
In addition to the government grant, a group of investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company, and Capital Group plan to provide an additional $750 million to Wolfspeed. said the company. Wolfspeed will also receive $1 billion in advanced manufacturing tax credits, meaning the company will have access to up to $2.5 billion in total.
Wolfspeed stock soared Tuesday following the announcement of $1.5 billion in funding. As of noon ET, the stock was up 3 points, or 30%.
Wolfspeed’s use of silicon carbide improves the efficiency of computer chips used in electric vehicles and other advanced technologies. The North Carolina-based company’s two projects are estimated to create 2,000 manufacturing jobs as part of a more than $6 billion expansion plan.
“Artificial intelligence, electric vehicles, and clean energy are all the defining technologies of the 21st century, and thanks to proposed investments in companies like Wolfspeed, the Biden-Harris administration will reinvigorate U.S. manufacturing of the chips that power them.” “We are taking meaningful steps toward achieving this critical technology,” Commerce Secretary Gina Raimondo said in a statement.
The new Wolfspeed facility in Siler City could become an important symbol in this year’s election, as it opened earlier this year in a swing state county experiencing rapid economic growth, thanks in large part to incentives from the Biden-Harris administration. There is.
The Democratic nominee, Vice President Kamala Harris, has argued to voters that her administration’s various incentives are driving more factory labor, while the Republican nominee, former President Donald Trump, has pushed back overseas factories with the threat of widespread tariffs. has stated that it will be relocated within the country. US.
In 2023, President Joe Biden gave a speech at Wolfspeed promoting his economic policies, saying it would help the United States win against China. Trump narrowly won North Carolina in the 2020 presidential election and has talked about reviving the state’s furniture manufacturing sector.
Biden administration Helped enact the CHIPS and Science Act of 2022 through Congress Amid post-pandemic concerns, there were concerns that losing access to Asian-made chips could push the U.S. economy into recession. Lawmakers at the time expressed concern that China was trying to control Taiwan, which accounts for more than 90% of advanced computer chip production.
The Biden-Harris administration’s argument is that government support will encourage additional private investment, and this appears to be the case with Wolfspeed.
Wolfspeed CEO Greg Lowe told The Associated Press that the U.S. currently produces 70% of the world’s silicon carbide and that the investment comes as China ramps up efforts in the field. said it would help the U.S. maintain its lead.
“We are very pleased with this grant,” Lowe said, calling the Department of Commerce officials who awarded the CHIPS Act funding “awesome.”
