Semiconductor manufacturer Wolfspeed is investing big in North Carolina with two chip-making technology projects worth more than $5 billion, including a new manufacturing plant and a partnership with North Carolina Agricultural and Technical State University to develop an on-campus research and development facility.
The company on March 28 announced its link with the university to apply for CHIPS and Science Act funding to build the research facility at the school's Durham campus. That follows its plan announced last September to build a $5-billion materials plant on a 445-acre site in Chatham County that it says would create at least 1,800 jobs.
Founded and headquartered in Durham, Wolfspeed produces technology used in electric vehicles, 5G networks and renewable energy and storage.
The new manufacturing facility will supply 200 mm silicon carbide wafers to Wolfspeed’s Mohawk Valley Fab, which opened last year in New York as the world’s first 200 mm silicon carbide fabrication facility.
Phase one of construction is anticipated to be completed in 2024 and will be combined with the company’s current materials expansion at its Durham headquarters. Wolfspeed expects to increase material production more than 10 times.
Wolfspeed currently produces more than 60% of the world’s silicon carbide materials, according to the company, but is engaged in a $6.5 billion capacity expansion to dramatically increase production.
The plans come as North Carolina’s economy saw an increase of more than 190,000 jobs in 2022, the best year for employment growth in the state in more than 30 years, according to the state Chamber of Commerce, amid the rise of electric vehicle (EV) sales.
Nationwide, those sales increased by two-thirds in 2022, with Wolfspeed noting that its silicon carbide devices enable EVs to go further on a single charge and reduce the amount of time drivers spend at charging stations.
“EV adoption is happening earlier and faster than anyone anticipated,” Gregg Lowe, president and CEO of Wolfspeed, told Axios Raleigh, adding that the company's customers include General Motors. He anticipates the new facility could be eligible for incentives under the CHIPS and Science Act.
The R&D facility will be focused on silicon carbide to support the next generation of advanced compound semiconductors. Wolfspeed and the university intend to also seek federal investment under the CHIPS Act, when its funding notice guidlines for R&D facilities is released in the fall.
According to the university, the research facility is intended to augment the company’s John Palmour Manufacturing Center for Silicon Carbide, which is described as being the world’s largest silicon carbide crystal growth facility and now is under construction in Siler City, N.C.
“The R&D facility will enable the next generation of innovators to explore new processes, applications, and breakthrough advancements to support the global transition from silicon to silicon carbide technology and achieve new levels of sustainability and energy efficiency across a variety of industries,” Lowe said in the NC A&T announcement.
The partnership with NC A&T was made in conjunction with President Joe Biden’s “Invest in America Tour” where the first stop was at Wolfspeed’s headquarters in Durham.
“Today, Wolfspeed is making the largest manufacturing investment in North Carolina history. $5 billion will go to constructing a building with 10x the production capacity of what stands there today,” President Joe Biden said in a March 29 tweet.
Big Incentives
The expansion also follows other large-scale tax incentives from state and local governments, set to total an estimated $775 million if Wolfspeed meets hiring and investment goals.
In 2022, the North Carolina Dept. of Commerce approved $76 million for Wolfspeed through a Job Development Investment Grant – if the company can hire 1,800 workers by 2030. Wolfspeed also stands to receive more than $600 million from both the county and Siler City. The project is also set to receive a state job development investment grant that authorizes potential reimbursement to the company of up to $76.1 million, paid over 20 years.
The state set aside $112.5 million in 2022 as an incentive for a chip manufacturing project in Chatham County. Wolfspeed will build a plant and grow the crystalline material for silicon carbide chips.
The state commerce agency coordinated recruitment of Wolfspeed, which also involved state, regional, and local organizations. The project could increase the county payroll by more than $140 million per year for the region, officials said.
The state will see a $17.5 billion economic impact over the next 20 years, said the Economic Development Partnership of North Carolina,
Wolfspeed’s project is estimated to grow the state’s economy using a formula that considers the new tax revenues generated by the 1,802 new jobs.
“Our clean energy supply chain continues to grow with advanced manufacturers like Wolfspeed and its record investment in our state,” said N.C. Commerce Secretary Machelle Baker Sanders. “North Carolina’s economy has a rich manufacturing legacy that benefits from its homegrown companies and innovative research ecosystem to support their success."
