SILER CITY — Call it semantics, or call it nuance. Either way, it may be costing Wolfspeed billions in federal incentive funding.
The current wording of the U.S. CHIPS and Science Act may mean Wolfspeed’s proposed Siler City factory, with an estimated $5 billion in economic investment and 1,800 new jobs, would lose out on the major incentive package.
The CHIPS Act was signed into law by the President Joe Biden Administration last August, and it aims to provide funding to boost American-made silicon carbide chips. Specifically, the funding is directed to advanced manufacturing facilities centered on semiconductor production.
Executives at top chip manufacturers and other industry experts have long predicted the demand for silicon carbide chips would exceed the current supply. According to The Wall Street Journal, China accounts for a third of global chip sales. This act was meant to remedy the supply issue and incentivize chip production in the U.S.
A lawyer from Wolfspeed, Bradley Kohn, told the IRS in a letter this month that under the definition of advanced manufacturing provided by the CHIPS Act, Wolfspeed’s new factory would not qualify.
The definition “excludes essential semiconductor-grade material production facilities,” Kohn’s letter said. The Chatham County facility is slated to be a material production facility for the company’s silicon carbide chips.
The exclusion of the Siler City plant under the current language of the act is especially surprising given the recent visit to the area by President Biden in March. During his stop in Durham, he specifically touted Wolfspeed as a key benefactor of the CHIPS Act and praised its $5 billion economic investment, the largest in North Carolina history.
The company isn’t alone in criticizing how CHIPS Act funding distribution. Chipmakers, including Wolfspeed, say putting limits on the grant program could make it more difficult for U.S. companies to compete and access funds, according to Triangle Business Journal.
Wolfspeed says its incoming facility, located at the Chatham Advanced Manufacturing (CAM) site, would be a 10-fold increase in the company’s output. The facility received more $160 million in statewide incentives and an additional $615 million in local incentives from Chatham County and Siler City to seal the deal on its new N.C. facility, which was announced last September.