After two years of construction, Durham-based Wolfspeed is putting the finishing touches on its $5 billion semiconductor plant in Siler City. The factory, named The JP in honor of company co-founder John Palmour, will make silicon carbide wafers. These are the building blocks of Wolfspeed chips assembled at the company's other factory in New York State.
Wolfspeed built The JP as it bets on a surge in demand for computer chips in electric vehicles, clean energy technologies, and artificial intelligence. In 2024, the Biden administration announced it would provide up to $750 million in direct funding for the project. The money comes from the 2022 CHIPS Act, which President Joe Biden signed into law after it passed Congress with bipartisan support. Biden visited Wolfspeed's Durham headquarters in 2023.
The law has already accelerated the growth of the U.S. semiconductor industry, said Sujai Shivakumar of the Center for Strategic and International Studies.
"You're seeing a lot of construction and you're seeing a lot of private money supporting the federal subsidy that has been in place," he said.
About 95% of CHIPS Act awards have gone to support chip production, according to a CSIS analysis. The investment comes at a time when American semiconductor production has shrunk, as tech companies refocused their supplies chains toward lower-cost chips produced in China and Taiwan.
But the future of CHIPS Act funding is uncertain, as the Trump administration has moved to cancel or claw back billons of dollars in technology and clean energy investments approved by the Biden administration. President Donald Trump singled out the CHIPS Act during his speech to a joint session of Congress in March.
"Your CHIPS Act is a horrible, horrible thing. We give hundreds of billions of dollars, and it doesn't mean a thing," he said, at the time.
Trump argued, without evidence, that companies weren't spending the money they were awarded.
CHIPS funding is administered by the U.S. Department of Commerce. Trump's Commerce Secretary, Howard Lutnick, recently told Congress that his agency is renegotiating funding requests approved by the Biden administration.
"All the deals are getting better, and the only deals that are not getting done are deals that should have never been done in the first place," Lutnick told the Senate Finance Committee earlier this month.
Executives at Wolfspeed said they’ve been working directly with the Trump administration to keep its grant, board chair Tom Werner said on a May earnings call.
"We continue to maintain a constructive dialog with the Trump administration and the CHIPS program office regarding federal funding," he said.
Wolfspeed's overtures to the White House come at a time when it's in serious financial trouble. The company has laid off workers and warned it may need to file for bankruptcy to pay off debts.
Another North Carolina company, Morrisville-based MACOM, received a $70 million grant to make computer chips for the defense industry. The award was announced in January, days before President Joe Biden left office.
Meanwhile, Republican North Carolina Senator Thom Tillis has introduced a bill that would expand eligibility for CHIPS funding to companies that produce raw materials for semiconductors. The measure has bipartisan support, but it's yet to get a hearing.
