Written by David Shepherdson and Sameer Manekar
WASHINGTON (Reuters) – Wolfspeed will receive a $750 million government grant for new silicon carbide wafer fabrication facility equipment in North Carolina, the U.S. Commerce Department said on Tuesday, making the U.S. semiconductor maker’s The stock price soared more than 30%.
The preliminary funding agreement requires Wolfspeed to “take additional steps to strengthen its balance sheet to better protect taxpayer funds,” the company said.
Wolfspeed said investment funds led by Apollo Global Management, Baupost Group, Fidelity Management & Research Company and Capital Group have agreed to provide an additional $750 million in new financing. said.
The company, whose customers include General Motors and Mercedes-Benz, uses silicon carbide, a more energy-efficient material than standard silicon, to make chips that transfer power from electric car batteries to motors. Used for tasks such as
The department said Wolfspeed’s devices are used in renewable energy systems, industrial applications and artificial intelligence applications.
Wolfspeed plans to expand its silicon carbide device manufacturing facility in Marcy, New York, increasing production capacity by nearly 30%. Both projects are part of a previously announced $6 billion capacity expansion plan.
The company said the investment will support Wolfspeed’s long-term growth plans, adding that it expects to receive $1 billion in cash tax refunds from the 48D Advanced Manufacturing Tax Credit under the Chips and Science Act.
"Today's announcement affirms the market-leading quality of Wolfspeed products and the commitment of Wolfspeed to the broader U.S. economic and national security interests,” Greg Lowe, CEO of Wolfspeed, said in a statement. I believe this is proof of the importance of
Pursuant to a preliminary memorandum of understanding with the Department of Commerce and agreements with lenders, Wolfspeed intends to restructure or refinance its outstanding 2026, 2028 and 2029 convertible notes at specified intervals prior to their maturity dates. .
The company also deferred interest payments on $120 million in cash due by June 30 and plans to raise up to $300 million in additional capital from non-debt sources over the next 12 months.
The company’s stock price has fallen by nearly three-quarters this year as demand for electric vehicles has slowed sharply.
Wolfspeed’s new 2 million square foot, multi-billion dollar silicon carbide wafer fab in Chatham County, North Carolina, announced in 2022. Wafers are used to make chips.
The company said earlier this year that it was confident it could deliver wafers from the facility by summer 2025 for its chip manufacturing needs.
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Awards from the $52.7 billion Semiconductor Research and Production Grant Program are subject to due diligence and are not yet final.
(Reporting by David Shepherdson in Washington and Sameer Manekar in Bengaluru; Editing by Christopher Cushing)
