Wolfspeed could build new $1B+ semiconductor facility in NC, CEO says
Date Published:Wolfspeed could make an economic development announcement by the end of the year, Gregg Lowe, the CEO of the Durham-headquartered silicon carbide semiconductor firm confirms to WRAL TechWire.. And at least one site in North Carolina is on the company’s short list of possible project locations, Lowe said.
“Absolutely, North Carolina is definitely in the discussion,” said Lowe. “We’re very engaged at the state level and at the local level and so forth, and we’re pretty close to a decision, a decision certainly before the end of the year.”
The company reported quarterly and annual earnings on Wednesday, surpassing the consensus expectations of Wall Street analysts in doing so.
“We had a really great 2022 and a fantastic end of the year,” said Lowe. “Our revenues came in ahead of target, our margins came in ahead of target.”
Wolfspeed stock surges on financial performance, outlook
And while that sent the company’s stock price surging, up about 17% in aftermarket trading just on Wednesday before Thursday’s opening bell. Then, by the closing bell on Thursday, the company’s stock had jumped to $112.91 per share.
At the close of trading on Wednesday, just before the earnings call began, the company’s stock price was $85.57. As of Friday morning, the stock had slid back from the prior day’s high and was trading around $109-110 per share. Still, the five-day trend is up by about 23%, and the company’s market capitalization is now about $13.5 billion.
But the possibility of short-term gains due to the company once again surpassing analyst expectations during an earnings report are not all that investors are excited about.
The company also increased the financial outlook for the fiscal year 2026, said Lowe, increasing the former target of $2.1 billion in revenue by between 30 and 40 percent.
“That’s a pretty giant move,” Lowe told WRAL TechWire. “We’re pretty excited about that.”
Why Wolfspeed could build in NC
Wolfspeed broke ground on a $1 billion semiconductor wafer fabrication facility in Mohawk Valley, New York, in March 2020. That decision came after the company landed a significant economic incentives package from the State of New York, including a $500 million grant to the company in return for a promise of creating 614 new local jobs paying average annual wages of about $75,000, according to reporting from the Utica Observer-Dispatch.
“All through COVID, we just continued building that factory, and opened it in April 2022,” said Lowe in the interview with WRAL TechWire. “Thank goodness we had the foresight to do that, and quite frankly, the courage to do that, because that capacity is coming online at exactly the same time there is a huge secular transition from silicon to silicon carbide in the semiconductor industry.”
The Mohawk Valley facility is the world’s first 200mm silicon carbide semiconductor wafer fab, said Lowe. But demand for semiconductors, generally, is near all-time highs, as companies across the globe continue to navigate a global semiconductor shortage that’s caused disruptions in many industries during the prior two-plus years.
So even as the factory is up and operational, it’s nearly almost at capacity, or soon will be, Lowe noted. That means that the company may need to expand, again.
Durham expansion not enough
All while Wolfspeed was completing the Mohawk Valley facility, the company was also retrofitting and updating the Durham campus, including renovating buildings that contained offices and what Lowe described as, essentially, indoor basketball courts, into a materials manufacturing operation.
The material is silicon carbide. And Lowe notes that this is of particular interest as the global economy moves toward electric vehicles as well as energy efficiency, including in the power sector.
That’s because silicon carbide can, in an automotive application, provide a greater range, between 5-15%, on an electric vehicle when silicon carbide semiconductor chips are used instead of silicon semiconductors, Lowe said.
Demand for silicon carbide is high, and Lowe and Wolfspeed anticipate that it will only grow.
Materials plant or wafer fab?
Already, said Lowe, as soon as the company opened the Mohawk Valley site, they became aware that they would need to construct another wafer fab.
“With the sheer momentum of the business, that indicates to us that that manufacturing facility, which is the world’s largest silicon carbide wafer fab, that that facility is not going to be enough,” said Lowe. “We’re talking about investing in more manufacturing facilities, and we’re going to have to do that from a wafer fab perspective but also from what we call materials, so the raw silicon carbide crystal growth technology.”
And both could be on the table for locating in North Carolina, Lowe told WRAL TechWire.
“We’re looking at a number of different options for wafer fabs and on the materials side of things,” said Lowe. “North Carolina has been great to work with, we’ve had a good partnership with New York has as well, so we’re closing in on a final decision there, and I’m certain it will be before the end of the year.”
One possibility for a wafer fab site could be in Chatham County, as the North Carolina state budget showed in June that the state as allocated possible grant funds for an economic development project related to the semiconductor industry.
The budget notes that such a project could include $4.8 billion in investment into the state with the potential of creating at least 1,800 new jobs in Chatham County. The site is, possibly, the Chatham Advanced Manufacturing site, or CAM.
Chatham County is also now home to VinFast’s planned automotive assembly factory and electric battery manufacturing facility, as VinFast has purchased the land at the Triangle Innovation Point site and site work has begun.
Original Article Source: WRAL TechWire