RALEIGH, N.C. — Shares of semiconductor giant Wolfspeed (WOLF, Financial) jumped roughly 25% Tuesday following the Biden-Harris administration announcing plans to provide up to $750 million in supporting the company's silicon carbide manufacturing expansion in the country. The funding comes under the CHIPS and Science Act, which aims to effectively boost domestic semiconductor production.
Wolfspeed and the U.S. Department of Commerce went through with a non-binding preliminary memorandum of terms (PMT) in ironing out the agreement, assisting in expanding the country's operations in North Carolina. In line with the agreement, Wolfspeed must raise $750 million in debt financing through senior notes issued through three tranches.
Additionally, a group of investment funds, including Apollo, The Baupost Group, Fidelity Management & Research Company, and Capital Group, could provide an additional $750 million in new financing. Also, the tech giant expects $1 billion in tax refunds from the advanced manufacturing tax credit under the CHIPS Act. The funds will support the company's ambitious plan to establish the world's most advanced 200mm silicon carbide manufacturing facility, accelerating long-term bottom-line goals.
