Siler City, NC – Earlier this month, the Biden Administration announced that it had signed the initial agreement for up to $750 million in federal funding to support the construction of a new silicon carbide wafer manufacturing facility in Siler City, North Carolina. This funding comes under the CHIPS and Science Act; Wolfspeed’s North Carolina project also falls under the CHIPS Act.
The Biden administration has signed the non-binding, preliminary memorandum of terms (PMT) for the proposed $750 million in federal funding under the CHIPS Act (HR 4346). The manufacturing facility will provide a reliable domestic supply of semiconductors, which will sustain the AI boom and the future energy economy.
“Wolfspeed is the world’s leading manufacturer of wafers and devices made from silicon carbide, a compound which has favorable chemical and material properties compared to traditional silicon, enabling Wolfspeed’s semiconductors to be highly energy-efficient and durable,” according to a press release.
The CHIPS taxpayer-paid funding is expected to act as a catalyst for the Wolfspeed North Carolina Project, an expansion of the device manufacturing facility in New York. These combined projects are projected to create over 2,000 manufacturing and 3,000 construction jobs in the company’s $6 billion capacity expansion plan.
“We intend to build a booming semiconductor R&D industry in the United States that will attract and keep semiconductor manufacturers in this country,” Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie Locascio said in a press release. “These efforts depend on a reliable domestic supply of specialized semiconductor wafers and devices, such as those produced by firms like Wolfspeed. With proposed investments such as this, we are realizing the goals of the CHIPS and Science Act by building out the domestic supply chains that will keep America’s R&D capacity healthy and competitive.”
The CHIPS funding would also support the construction of the John Palmour Manufacturing Center in Siler City. This 2 million square foot facility would become the largest silicon carbide wafer manufacturing facility in the US and the world’s first high-volume 200mm silicon carbide wafer manufacturing facility.
Wolfspeed manufactures silicon carbide devices that power electric vehicles (EVs) and plug-in hybrids. These devices enable a more significant drive range per charge, faster charge times, and lower overall system costs.
However, there has been a decline in the demand for EVs, especially in the US and Europe. “In Europe and the US, the shift to EVs effectively went into reverse, as cars with exhaust pipes took a growing share of overall sales,” reported The Business Times. JD Power, an automotive researcher, predicted that battery-powered models will only account for 9 percent of sales in the US, down more than three percent from the previous estimate of 12.4 percent.
Wolfspeed is funded by a Job Development Investment Grant (JDIG), reimbursed under the Economic Development Project Reserve. In the 2021 budget (2022 adjustments), the reserve fund allocated $57.5 million for site development to Wolfspeed.
“We’re grateful for the continued support of Secretary Raimondo and the CHIPS Office throughout this process, as this announcement marks a pivotal milestone in Wolfspeed’s long-term growth strategy and important technology,” Wolfspeed CEO Gregg Lowe said in a press release. “As a key player in the semiconductor industry, this proposed funding will enable us to solidify our leadership position with a first-of-a-kind 200mm silicon carbide manufacturing footprint in New York and North Carolina while contributing to the resilience and competitiveness of the U.S. supply chain.”
In partnership with North Carolina Agricultural and Technical State University (NC A&T), Wolfspeed has committed $4 million over five years to establish the Wolfspeed Endowed Scholars Program. According to the press release, the partnership aims to “establish curriculum and training programs to create undergraduate and graduate silicon carbide manufacturing credentials and career advancement programs for manufacturing workers. “
In 2022, Gov. Cooper signed Executive Order 246, which commits the state of North Carolina to increase registered zero-emissions vehicles (ZEVs) to 1.25 million by 2030.
“If North Carolina were to achieve EO 246’s ZEV goal, then ZEVs will comprise 14 percent of the vehicular fleet by 2030,” according to a report from the John Locke Foundation.
The state’s vehicular fleet has grown by 127,000 each year. However, most of these vehicles are not ZEVs but ICE vehicles (Internal Combustion Engine).
“Since 2016, 604,600 additional conventional ICE vehicles have been registered in North Carolina, compared with only 67,900 hybrid electric vehicles. And with the sole exception of 2022, far more ICE vehicles have been registered every year in North Carolina than HAV EV and PHEV vehicles.”
According to the report, to reach the 2030 goal set by EO 246, ZEV sales would have to grow by 38 percent each year. Regarding vehicle sales, EV dealers must double sales every two years.
“There is a great deal of taxpayer money being spent at the federal and state level to boost EVs — building incentives, production incentives, purchase incentives, etc.,” Jon Sanders, Director of the Center for Food, Power and Life at the John Locke Foundation told the Carolina Journal. “It’s a lot of government effort at other people’s expense to prop up something that isn’t anything more than a niche interest. That money could be better spent by people addressing their actual needs rather than the president’s personal preference.”