Wolfspeed, Inc. (NYSE: WOLF), the global leader in silicon carbide technology and a longtime Smith Anderson client, will build a new, state-of-the-art, multi-billion-dollar manufacturing facility in Chatham County, North Carolina, near its existing Durham Materials factory, the company announced on Sept. 9.
The investment will ultimately generate a more than 10-fold increase from Wolfspeed’s current silicon carbide production capacity on its Durham campus, supporting the company’s long-term growth strategy, accelerating the adoption of silicon carbide semiconductors across a wide array of end-markets and unlocking a new era of energy efficiency, according to a press release.
The facility will primarily produce 200mm silicon carbide wafers, which are 1.7x larger than 150mm wafers, translating into more chips per wafer and ultimately lower device costs. These wafers will be used to supply Wolfspeed’s Mohawk Valley Fab, which opened earlier this year as the world’s first, largest and only fully automated 200mm silicon carbide fabrication facility.
State and local funding, including a Job Development Investment Grant from the North Carolina Department of Commerce, will support the development of the facility’s first phase and represents an approximately $1.0 billion incentive package from the state, county and local governments. In addition, the company hopes to apply for and obtain federal funding from the CHIPS and Science Act to accelerate the construction and build-out of the facility. Over the next eight years, the company intends to continue to invest, looking to create roughly 1,800 jobs.
"Wolfspeed’s decision further validates North Carolina as the epicenter of clean energy," said North Carolina Governor Roy Cooper. "This is another milestone in our drive toward a clean energy economy as it will boost electric vehicle manufacturing and offshore wind while fighting climate change and putting money in the pockets of everyday North Carolinians with great paying jobs."
Phase one construction should be completed in 2024 and cost approximately $1.3 billion. Between 2024 and the end of the decade, the company will add additional capacity as needed, eventually occupying more than one million square feet on the 445-acre site.
The Smith Anderson team advising Wolfspeed in the transaction was led by Gerald Roach, Dave Horne, Davis Roach, Walter Rogers, Robert Shaw and Dana Simpson, who assisted on project strategy and negotiation; state and local incentives and infrastructure; real estate and site development; and legislative affairs.
Smith Anderson has represented Wolfspeed (formerly Cree) for over 20 years in a wide range of transactions, including multiple acquisitions. Of recent note in 2021, the firm advised Wolfspeed in the sale of its LED products business unit to SMART Global Holdings, Inc. (Nasdaq: SGH) for up to $300 million, and in 2019, advised on the divestiture of its lighting products business unit to IDEAL Industries, Inc. for an initial cash payment of $225 million plus the potential to receive an earn-out payment. Additionally, in 2018 Smith Anderson advised Wolfspeed in a definitive agreement to purchase the assets of the RF power business of Infineon Technologies AG, a world leader in semiconductor solutions, for €345 million in cash.
Wolfspeed (NYSE: WOLF) leads the market in the worldwide adoption of silicon carbide and gallium nitride (GaN) technologies. The company provides industry-leading solutions for efficient energy consumption and a sustainable future. Wolfspeed’s product families include silicon carbide materials, power devices and RF devices targeted for various applications such as electric vehicles, fast charging, 5G, renewable energy and storage, and aerospace and defense. Learn more at www.wolfspeed.com.