Key Takeaways
- Wolfspeed shares lost nearly half their value Friday as comments by the semiconductor firm’s outgoing interim Executive Chairman brought concerns about whether it will secure federal funding for its expansion efforts.
- The company announced last October it was in line to receive $750 million in grants and $1 billion in tax credits from the CHIPS and Science Act of 2022.
- Outgoing interim Executive Chairman Thomas Werner raised investor worries about whether the money would be forthcoming.
Shares of Wolfspeed (WOLF) cratered Friday after the semiconductor maker’s outgoing interim Executive Chairman raised investor concerns the firm may lose out on millions in federal money from the CHIPS and Science Act of 2022.
According to Axios, Thomas Werner told reporters that the company is being managed to be not overly reliant on CHIPS funds or tax incentives.
Last October, Wolfspeed said it had signed a preliminary agreement with the Department of Commerce to receive up to $750 million in direct funding from the CHIPS program. In addition, it expected to get $1 billion in tax refunds under the advanced manufacturing tax credit that was also part of the CHIPS law. The company planned to use the money, along with $750 million from a consortium of investment funds, as part of its expansion of operations in North Carolina and New York.
Werner added that Wolfspeed anticipates a final decision on the CHIPS grant by late summer, although it believes the legislation will change in some fashion, Axios reported.
Wolfspeed Named New CEO Thursday
Werner stepped into the interim Executive Chairman role when Wolfspeed fired CEO Gregg Lowe last November. Prior to that, the struggling company began a restructuring plan that included facility closures and consolidation. Yesterday, Wolfspeed announced that former Micron Technology (MU) executive Robert Feurle would take over the CEO position May 1, and that Werner would “return as Chairman of the Board following the transition.”
Wolfspeed shares sank 48% intraday Friday, trading close to their all-time lows.
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