The Biden-Harris administration has announced a preliminary, non-binding memorandum with Wolfspeed Inc., a global leader in silicon carbide wafer and device production, for a proposed direct investment of up to $750 million through the CHIPS and Science Act. This support aims to build the world's largest 200 mm silicon carbide ecosystem and create over 5,000 jobs between North Carolina and New York.
Investment Objective
The proposed investment, which is a key part of President Biden's "Investing in America" agenda, aims to strengthen domestic semiconductor manufacturing capacity, supporting the development of future technologies like artificial intelligence and renewable energy. The factory will be located in Siler City, North Carolina, and will produce silicon carbide wafers for various sectors, including electric vehicles, clean energy, and national security applications.
In parallel, Wolfspeed will expand its production plant in Marcy, New York, creating over 2,000 new manufacturing jobs and 3,000 construction jobs. With an expansion plan of more than $6 billion, Wolfspeed aims to increase silicon carbide device production fivefold and 200 mm material production capacity tenfold.
Importance of Silicon Carbide
Silicon carbide, a highly efficient and durable compound compared to traditional silicon, enables better energy management, crucial for electric vehicles, renewable energy systems, and artificial intelligence. Wolfspeed's devices sold in 2023 will save approximately 72 million tons of CO2 over their lifecycle.
Founded in 1987 in North Carolina, Wolfspeed is leading the development of next-generation semiconductors. Its products not only enhance electric vehicles by extending range and reducing charging times, but also support national strategic projects, such as U.S. defense applications.
Silicon Carbide: What It Is and Why It Matters
Silicon Carbide (SiC) is a compound made of silicon and carbon, known for its chemical and physical properties that make it particularly suitable for applications requiring high resistance to heat and wear. Compared to traditional silicon, silicon carbide can operate under much more extreme conditions, such as higher temperatures or electrically stressful environments.
Key Applications
- Electric Vehicles (EVs): Silicon carbide-based semiconductors make electric vehicles more efficient, reducing energy consumption and increasing battery range. They also enable faster charging and lower production costs for electronic systems.
- Renewable Energy: It is used in solar and wind energy systems to convert energy more efficiently, reducing energy losses and improving the durability of components.
- Artificial Intelligence (AI): Due to its ability to operate at high frequencies, silicon carbide can be used in AI processors, ensuring higher performance with lower energy consumption.
- Military Applications: It is also used in national security technologies, where highly resistant devices are needed to operate in extreme conditions.
Local Collaborations and Initiatives
Wolfspeed's investment is not limited to technology. The company has initiated important collaborations with educational institutions and local organizations to strengthen the workforce. In collaboration with North Carolina Agricultural and Technical State University, Wolfspeed has allocated $4 million for a five-year scholarship program to train specialists in silicon carbide manufacturing.
In New York, Wolfspeed has partnered with programs like Real Life Rosies and VET ST.E.P. to encourage the inclusion of women and veterans in the semiconductor sector. Projects have also been launched to increase the availability of childcare services, addressing a critical need for local families.
Energy Efficiency and Sustainability
Wolfspeed has obtained Silver Leadership in Energy and Environmental Design (LEED) certification in New York and is pursuing the same certification for the new Siler City plant. Among its main goals is reducing operational emissions by 50% by 2030.
The economic impact of the investment goes beyond plant construction. In addition to CHIPS Act funds, Wolfspeed expects to attract at least another $750 million in private capital, further accelerating its expansion.
Funding Terms
The funds proposed under the CHIPS Act will only be disbursed upon achieving specific construction and operational milestones. In line with Department of Commerce practices, Wolfspeed must strengthen its financial position to safeguard public funds, a key condition for completing the agreement.
The success of the CHIPS and Science Act and its incentive measures depends on the ability to create and maintain a strong manufacturing supply chain in the United States, ensuring both national security and economic opportunities for local communities.
Wolfspeed's Role
Founded in 1987 in North Carolina, Wolfspeed is a global leader in silicon carbide device manufacturing. The company is a pioneer in creating silicon carbide wafers, which are then used to manufacture chips and semiconductors. One of Wolfspeed's most ambitious projects is the construction of a new facility in North Carolina, the John Palmour Manufacturing Center, which will become the world's largest 200 mm silicon carbide wafer factory.
Wolfspeed isn't stopping there. Along with the Siler City project, the company is also expanding its Marcy plant in New York, which will become the first fully automated factory for silicon carbide device manufacturing.
Glossary
- CHIPS: Creating Helpful Incentives to Produce Semiconductors. U.S. government program to incentivize semiconductor production in the country.
- CHIPS and Science Act: U.S. law promoting semiconductor manufacturing and scientific development.
- CO2: Carbon Dioxide. Greenhouse gas produced by human activities, the main cause of climate change.
- LEED: Leadership in Energy and Environmental Design. International certification for environmentally sustainable buildings.
- PMT: Preliminary Memorandum of Terms. Non-binding document outlining the preliminary terms of a funding agreement.
- R&D: Research and Development. Activities related to technological innovation.
- Silicon Carbide (SiC): Semiconductor material used to produce more energy-efficient devices than traditional silicon.
