The Biden administration announced on Tuesday, October 15, a plan to provide $750 million in funding to assist the American silicon carbide wafer giant, Wolfspeed, in building a new factory in North Carolina and expanding its production facilities in New York. This move is aimed at solidifying the United States’ global leading position in the field of silicon carbide manufacturing.
Wolfspeed primarily produces silicon carbide chips, which are more energy-efficient compared to traditional silicon materials. These chips are widely used in the electric vehicle sector to extend the driving range per charge, accelerate charging times, and reduce overall system costs. Wolfspeed’s clients include General Motors and Mercedes-Benz, among others.
The Department of Commerce stated in a press release that this investment will “support the construction of the world’s largest 200mm silicon carbide wafer ecosystem and create over 5,000 job opportunities in North Carolina and New York.”
According to the statement, the new 2 million square feet factory in North Carolina will become the largest silicon carbide wafer manufacturing center in the United States and the world’s first factory to produce 200mm silicon carbide wafers on a large scale.
The Department of Commerce noted that products sold by Wolfspeed in 2023 can reduce approximately 72 million metric tons of carbon dioxide emissions over their lifecycle. These products can also be used in renewable energy systems, artificial intelligence (AI), and other fields. Wolfspeed has also provided new generation silicon carbide technology for the US military.
US Secretary of Commerce, Raimondo, stated in the release: “Artificial intelligence, electric vehicles, and clean energy are defining technologies of the 21st century. By investing in companies like Wolfspeed, the Biden-Harris administration is taking a meaningful step towards revitalizing the American semiconductor manufacturing industry, as these chips are foundational to critical technologies.”
Wolfspeed stated that with the government funding driving it, several private funds led by Apollo Global Management also plan to provide an additional $750 million to Wolfspeed.
Furthermore, Wolfspeed expects to receive $1 billion from advanced manufacturing tax credits, meaning the company will receive a total of up to $2.5 billion in funding.
Following the announcement, Wolfspeed’s stock price surged significantly, with an increase of over 30% at one point.
Wolfspeed’s CEO, Gregg Lowe, told the Associated Press that the US currently holds a 70% market share in silicon carbide production globally, and these investments will help the US maintain its leading position as China seeks development in the chip sector.
Tian Xie, an economics professor at the University of South Carolina, believes that the Biden administration’s investment in Wolfspeed is of significant importance.
Xie told sister media NTD television of The Epoch Times, “Mainly targeted at China, it’s about the US chip act, emphasizing support for domestic chips. Because these chips involve a lot of US technology, the US needs to reduce reliance on foreign chips and must develop its own chip manufacturing industry, not just in design but also in production. This should be a part of the US chip act, and of course, it will greatly benefit and assist local chip manufacturing in the US.”
In addition, North Carolina is a key swing state in this year’s US election.
By funding Wolfspeed’s new factory, Democratic presidential candidate Harris is attempting to demonstrate to voters that a series of government incentives is increasing job openings and rapidly expanding the state’s economy.