Important points
Wolfspeed (WOLF) shares soared nearly 25% on Tuesday after the high-speed semiconductor maker reported it could receive up to $2.5 billion in funding from an investment group under the 2022 CHIPS and Science Act.
The company noted that the U.S. Department of Commerce is proposing $750 million in direct funding from the CHIPS Act and expects to receive $1 billion in refunds from tax credits included in the bill.
The company also announced that a consortium of investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company, and Capital Group have agreed to provide an additional $750 million.
Wolfspeed said the funding will be used by the company for “data centers for EV powertrains, e-mobility, renewable energy systems, battery energy storage systems, AI and cryptocurrency.”
A “meaningful step” towards reviving domestic chip manufacturing
Commerce Secretary Gina Raimondo said federal investments in companies like Wolfspeed are “a meaningful step toward reinvigorating U.S. chip manufacturing” behind technologies such as AI, EVs and clean energy. He said that.
Joseph Jackson, partner at Apollo, said the company said, “Wolfspeed is at the forefront of a significant transformation in sustainable transportation, and we are committed to ensuring the company has sustained access to capital to complete its expansion plans.” “This will help solidify our leadership in this field,” he added.
Despite today’s surge, Wolfspeed stock has lost two-thirds of its value this year.
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