Wolfspeed raises $2.5bn to continue SiC plans
Wolfspeed has raised total of $2.5bn to support production of silicon carbide in a move that it says will take it to profitability.
The push to build both wafer plants and a 200mm fab has pushed Wolfspeed’s finances, and these deals will allow the company to complete its expansion plans following financial restructuring. The deals announced today include $750m from the US government under the CHIPS and Science Act, $1bn in tax credits and $750m from investors. This highlights the challenges of funding compound semiconductor production.
The funding would enable Wolfspeed to complete its $6bn plans with the construction and installation of equipment at The John Palmour Manufacturing Centre for Silicon Carbide in Siler City, North Carolina and completion of the fully automated 200mm Mohawk Valley Fab M-Line West Expansion in Utica, NY. This would create a 10x increase in the production of 200mm SiC wafers and 5x increase in device manufacturing capacity.
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With the electric vehicle market weakening, attention is turning to using SiC in power supplies for AI data centres, although it faces a stronger challenge from gallium nitride (GaN) in this area.
“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 Wolfspeed CEO, Gregg Lowe.
“As a key player in the semiconductor industry, this proposed investment will enable us to solidify our leadership position with a first-of-its-kind 200mm silicon carbide manufacturing footprint in upstate New York and central North Carolina, while contributing to the resilience and competitiveness of the US supply chain.”
“Silicon carbide is already enabling superior energy efficiency across mission-critical industries of the future like electric vehicles, e-mobility, solar and wind energy, industrial power applications, and AI data centres. While EVs have been the driver of silicon carbide adoption thus far, we believe the use cases for our technology are expansive and will only continue to grow as more and more industries find themselves needing to solve for the same power loss, system size, and system cost challenges as automakers,” he added.
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The Chips Act funding is based on certain operational and construction milestones and other requirements and includes an obligation for Wolfspeed to raise an aggregate of $750m in debt financing over three tranches.
Wolfspeed will also restructure its debt, deferring a total of $120 million in cash interest payments due before June 2025 and raising up to $300 million of additional capital from non-debt sources over the next 12 months.