Wolfspeed announced on October 15, 2024, that it has signed a non-binding preliminary memorandum of terms (PMT) for up to $750 million in proposed direct funding under the U.S. CHIPS and Science Act. This federal support is intended to bolster domestic production of silicon carbide, a critical material for electric vehicles, AI data centers, and renewable energy systems.
In addition to the government grant, a consortium of investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company, and Capital Group has agreed to provide Wolfspeed an additional $750 million in new financing. This combined $1.5 billion in funding is expected to support Wolfspeed's long-term growth plans and expansion of its silicon carbide manufacturing facilities in North Carolina and New York.
The company also anticipates receiving $1 billion in cash tax refunds from the advanced manufacturing tax credit under Section 48D, bringing the total expected capital access to up to $2.5 billion. The first direct CHIPS disbursement is projected for mid-calendar 2025, contingent on meeting financial milestones, including raising additional non-debt capital and refinancing its 2026 convertible notes.
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