Wolfspeed decided to stay close to home for its new multibillion-dollar semiconductor plant.
Wolfspeed, formerly known as Cree, on Friday said it will build a $5 billion factory near Siler City, North Carolina, about 45 miles southwest of its home city of Durham. The opening is set for 2030, and the company expects to create 1,800 new jobs.
It’s the latest company to unveil big expansion plans after Congress and President Biden approved the CHIPS Act, which provides at least $50 billion for U.S.-based research, design and manufacturing of semiconductors. Intel and Micron Technology both announced expansion plans following the law’s approval.
Wolfspeed’s choice also represents another big economic development project in the Triangle and Piedmont Triad regions of North Carolina, following Toyota near Greensboro and electric vehicle maker VinFast near Raleigh.
“Wolfspeed’s decision further validates North Carolina as the epicenter of clean energy,” Gov. Roy Cooper said in a news release.
North Carolina will provide Wolfspeed with $76.1 million in tax incentives based on job creation. The state also promised $57.5 million for site preparation and $10 million for infrastructure upgrades.
The company will work with North Carolina Agricultural and Technical State University in Greensboro to develop workforce training programs.
Newest Plant
Wolfspeed already operates a chip manufacturing facility in Research Triangle Park in North Carolina. In April, it opened a 557,000 square-foot factory near Utica, New York, focused on silicon carbide device fabrication.
The company's new North Carolina facility will focus on silicon carbide-based semiconductors for use in electric vehicles and renewable energy and storage.
While the CHIPS Act is designed to bolster the United States’ position in semiconductors and reduce its reliance on Chinese chips, the broader semiconductor market has struggled.
Lower demand for personal computers and phones, which all rely heavily on semiconductors, have dragged down chip manufacturers.
The Philadelphia semiconductor index has dropped 34% this year, compared to a 16% drop in the S&P 500. Stocks are down for both domestic and overseas chipmakers, including Nvidia and Taiwan Semiconductor Manufacturing.
But Wolfspeed, which specializes in chips for automobiles and power supply, has been an outlier. Its stock climbed 28%, to $111.29 per share, over a 12-month period through Sept. 8.
The chip industry is slowly recovering from supply chain issues that dramatically slowed global deliveries. Tom Sweet, chief financial officer of Dell Technologies, said this week that the supply chain for chips used in personal computers has largely returned to normal, according to Bloomberg.