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Wolfspeed could invest more than $1 billion in a semiconductor factory in North Carolina

DURHAM- Wolfspeed could make an economic development announcement by the end of the year, Gregg Lowe, CEO of the Durham-headquartered silicon carbide semiconductor company, confirms to WRAL TechWire. And at least one location in North Carolina is on the company’s shortlist. project locations, Lowe said.

“Absolutely, North Carolina is definitely in the discussion,” Lowe said. “We’re very engaged at the state level and at the local level and so on, and we’re pretty close to a decision, a decision certainly before the end of the year.”

The company announced its quarterly and annual results on Wednesday, beating consensus expectations from Wall Street analysts.

“We’ve had a really good 2022 and a fantastic year-end,” Lowe said. “Our revenues exceeded target, our margins exceeded target.”

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And while that did boost the company’s stock price, up about 17% in aftermarket trading just Wednesday before Thursday’s opening bell. Then, at the closing bell on Thursday, the company’s shares had jumped to $112.91 per share.

As of Wednesday’s close of trading, just before the start of the earnings call, the company’s stock price was $85.57. By Friday morning, the stock had retreated from the previous day’s high and was trading around $109-110 per share. Still, the five-day trend is up around 23% and the company’s market cap is now around $13.5 billion.

But the possibility of near-term gains as the company beats analysts’ expectations again in an earnings report isn’t the only thing investors are excited about.

The company also raised the financial outlook for fiscal year 2026, Lowe said, raising the former $2.1 billion revenue target by 30% to 40%.

“It’s a pretty giant gesture,” Lowe told WRAL TechWire. “We are very excited about this.”

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Why Wolfspeed Might Build in NC

Wolfspeed opened a $1 billion semiconductor wafer fab in Mohawk Valley, New York in March 2020. The move came after the company landed a major state economic incentive program of New York, including a $500 million grant to the company in return for a pledge to create 614 new local jobs paying an average annual salary of about $75,000, according to Utica Observer-Dispatch reports. .

“Throughout COVID, we just kept building this factory and opened it in April 2022,” Lowe said in the interview with WRAL TechWire. “Thank goodness we had the foresight to do it, and frankly, the courage to do it, because this capability is coming online at exactly the same time that there’s 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, Lowe said. But demand for semiconductors, in general, is near historic highs, as companies around the world continue to grapple with a global semiconductor shortage that has caused disruption across many industries over the past two years. previous.

So even though the plant is up and running, it’s almost at capacity, or soon will be, Lowe noted. This means that the business may have to expand again.

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Durham expansion is not enough

While Wolfspeed was completing the Mohawk Valley facility, the company was also upgrading and modernizing the Durham campus, including renovating buildings that contained offices and what Lowe described as essentially indoor basketball courts, into a manufacturing operation. of materials.

The material is silicon carbide. And Lowe notes that this is of particular interest as the global economy shifts towards electric vehicles as well as fuel efficiency, including in the energy sector.

Indeed, silicon carbide can, in an automotive application, provide greater range, between 5 and 15%, on an electric vehicle when silicon carbide semiconductor chips are used instead of solid-state semiconductors. silicon, Lowe said.

Silicon carbide demand is high, and Lowe and Wolfspeed predict it will only grow.

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Material factory or wafer factory?

Already, Lowe said, as soon as the company opened the Mohawk Valley site, they realized they would need to build another wafer manufacturing plant.

“With the momentum of the business, it tells us that this manufacturing facility, which is the largest silicon carbide wafer facility in the world, that this facility is not going to be enough,” Lowe said. “We’re talking about investing in more manufacturing facilities, and we’re going to have to do that from an wafer manufacturing perspective, but also from what we call materials, so carbide crystal growth technology. raw silicon.”

And both could be on the table for a location in North Carolina, Lowe told WRAL TechWire.

“We are looking at a number of different options for the wafer fabs and on the materials side,” Lowe said. “North Carolina has been great to work with, we’ve had a great partnership with New York as well, so we’re getting closer to a final decision there, and I’m sure it will be before the end of the year. .”

One possibility for a wafer manufacturing site could be in Chatham County, as the North Carolina state budget showed in June that the state had allocated possible grant funds for a related economic development project. to the semiconductor industry.

The budget notes that such a project could include $4.8 billion in state investments with the potential to create at least 1,800 new jobs in Chatham County. The site is, possibly, the site of Chatham Advanced Manufacturing, or CAM.

Chatham County is also now home to VinFast’s planned automotive assembly plant and electric battery manufacturing plant, as VinFast purchased the land at the Triangle Innovation Point site and work on the site has begun.

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