The U.S. Department of Commerce and Wolfspeed, Inc. signed a non-binding preliminary memorandum of terms on October 15, 2024, proposing up to $750 million in direct funding under the CHIPS and Science Act. The funding would support construction of the John Palmour Manufacturing Center for silicon carbide in Siler City, North Carolina, and is expected to catalyze expansion of Wolfspeed’s existing device manufacturing facility in Marcy, New York. Together, the two projects are estimated to create more than 2,000 manufacturing jobs and 3,000 construction jobs.
What it means
The Siler City facility, at 2 million square feet, would be the largest silicon carbide wafer manufacturing facility in the United States and the world’s first high-volume 200mm silicon carbide wafer manufacturing facility. The Marcy fab, already described as the world’s first fully automated 200mm silicon carbide power device fab and qualified to serve automotive, industrial, and energy customers, would see production capacity increase by approximately 30% through the expansion. Wolfspeed said the projects are part of a previously announced capacity expansion plan exceeding $6 billion, and the company anticipates a five-fold increase in silicon carbide device output and a ten-fold increase in 200mm materials production capacity due in part to these projects. The proposed CHIPS funding is expected to catalyze at least $750 million in additional private capital investment. Wolfspeed also plans to claim the Department of the Treasury’s Investment Tax Credit, expected to be up to 25% of qualified capital expenditures. The preliminary memorandum of terms contains conditions for funding disbursements tied to construction and operating milestones and requires Wolfspeed to take additional steps to strengthen its balance sheet.
Wolfspeed, founded in North Carolina in 1987, supplies silicon carbide technologies to the U.S. military for national security applications. In North Carolina, Wolfspeed committed $4 million over five years to establish the Wolfspeed Endowed Scholars Program at North Carolina Agricultural and Technical State University, with the aim of creating undergraduate and graduate silicon carbide manufacturing credentials and career advancement programs. In New York, Wolfspeed established workforce partnerships with Real Life Rosies, VET ST.E.P., Mohawk Valley Community College, and the Manufacturers Association of Central New York to develop a Registered Apprenticeship program. The company also plans to build four new licensed in-home care programs in New York creating 24 child care slots and five to ten programs in North Carolina creating 40 to 80 slots. Wolfspeed has achieved Silver LEED certification at its New York facility and is pursuing LEED certification in Siler City, and the company plans to cut operational emissions by 50% by 2030.
Key facts
- Proposed CHIPS Act direct funding: up to $750 million (non-binding preliminary memorandum of terms)
- New facility: John Palmour Manufacturing Center for silicon carbide, Siler City, North Carolina — 2 million square feet
- Siler City facility would be the world’s first high-volume 200mm silicon carbide wafer manufacturing facility
- Expansion site: Wolfspeed device manufacturing facility, Marcy, New York — approximately 30% production capacity increase
- Estimated jobs: 2,000+ manufacturing, 3,000 construction
- Projects are part of Wolfspeed’s previously announced $6 billion-plus capacity expansion plan (according to the company)
- Proposed CHIPS funding expected to catalyze at least $750 million in private capital investment
- Wolfspeed anticipates five-fold increase in silicon carbide device output and ten-fold increase in 200mm materials production capacity (according to the company)
- Wolfspeed committed $4 million over five years to N.C. A&T Wolfspeed Endowed Scholars Program
- Department of the Treasury Investment Tax Credit expected to be up to 25% of qualified capital expenditures
Source: U.S. Department of Commerce news release (commerce.gov)