Investing.com -- Wolfspeed (NYSE:WOLF) shares have surged more than 30% on Tuesday after the company announced that it will receive significant financial support, with $750 million proposed from the U.S. Department of Commerce under the CHIPS and Science Act and another $750 million in new financing from a consortium led by Apollo, The Baupost Group, Fidelity, and Capital Group.
The company said the funding will drive its U.S. expansion, reinforcing its leadership in silicon carbide manufacturing to support electric vehicles (EVs), AI data centers, and renewable energy systems.
In addition to the combined $1.5 billion, the company expects approximately $1 billion in cash tax refunds over the coming years through the CHIPS Act’s Section 48D tax credits, totaling up to $2.5 billion in capital.
“This support galvanizes our ability to expand domestic manufacturing, accelerate innovation in next-generation semiconductor technology, and meet the increasing global demand for silicon carbide,” said CEO Gregg Lowe.
Wolfspeed’s expansion will feature the world’s largest 200mm silicon carbide manufacturing footprint across its sites in upstate New York and central North Carolina.
Secretary of Commerce Gina Raimondo highlighted the importance of the project, stating: “The United States is building and fortifying our semiconductor manufacturing capabilities to serve our economic and national security interests.”
Apollo Partner Joseph Jackson added: “We believe Wolfspeed is at the forefront of a critical transformation in sustainable transportation and ensuring that the company has durable capital access to complete its expansion plans will help solidify its leadership.”
The funding is subject to milestone achievements, including Wolfspeed raising additional capital and restructuring existing debt.