Semiconductor producer Wolfspeed plans to use $750 million in preliminary terms offered by the U.S. Commerce Department to build a plant in North Carolina and expand another in New York, the officials and the company on October 15.
The funding comes from the CHIPS and Science Act of 2022, which established $39 billion to support the construction, expansion and modernization of semiconductor chip manufacturing plants, known as fabs, and their suppliers in an effort to strengthen national supply chains. In addition, Wolfspeed says it has reached an agreement for another $750 million in new financing from a group of mutual funds and expects to receive $1 billion in cash tax refunds from the tax credit for the Advanced Manufacturing CHIPS Act, totaling $2.5 billion. more to invest in the projects.
“This proposed investment will allow us to solidify our leadership position with a first-of-its-kind 200mm silicon carbide manufacturing footprint in New York State and central North Carolina, while contributing to the resiliency and competitiveness of the US supply chain,” Wolfspeed said. CEO Gregg Lowe said in a statement.
Wolfspeed, based in Durham, North Carolina, already has the new $5 billion John Palmour Silicon Carbide Manufacturing Center under construction by Whiting-Turner Contracting Co. in Siler City, NC. The 1.2 million square foot plant would produce 200mm silicon carbide wafers. It would supply Wolfspeed’s Mohawk Valley Fab near Utica, N.Y. Production at the Siler City plant is scheduled to begin next year, with phase-out of the full facility slated for 2030.
The $1.2 billion Mohawk Valley Fab was completed in 2022 to produce 200mm chips on 200mm wafers. The facility received LEED BD+C: New Construction Silver certification earlier this year. Wolfspeed says it will expand the factory to meet growing demand from the electric vehicle, telecom and industrial markets, but has shared few details about the scope of the project.
The announcement comes after Wolfspeed told investors in August that it plans to close an existing fab that produces smaller 150mm chips in Durham, where Lowe said operating costs are higher than at the Mohawk Valley fab .
Wolfspeed and Commerce Department officials have yet to finalize the financing agreement. The Biden administration has framed its effort to boost domestic chip production as key to both the economy and national security because of the widespread use of chips in technology in consumer goods, commercial applications and military equipment. Commerce Secretary Gina Raimondo said in a statement that the effort will also help support key emerging technologies such as artificial intelligence, electric vehicles and clean energy.
“The United States is building and strengthening our semiconductor manufacturing capabilities to serve our economic and national security interests while creating jobs and economic opportunity for communities across the country,” he said.
Officials have previously announced billions of dollars in funding for other chipmakers, including Texas Instruments, Intel, TSMC, Micron and others.
