As Biden visits, the Durham chip manufacturer Wolfspeed sees the sky as the limit

Wolfspeed isn’t new, but the Durham company President Joe Biden will tour on Tuesday afternoon has, in recent years, forged a different trajectory.

For most of its history, dating back to its start in 1987, the company was perhaps best known for making LED lights. But starting five years ago, Wolfspeed (then called Cree) ditched its lighting and LED divisions and steered resources exclusively toward the production of a particular type of semiconducting material and chip.

Today, Wolfspeed chips power electric cars, fast-charging stations, renewable energy storage, and aerospace and defense equipment around the world. Its largest customer base is in Europe, followed by China and the United States. Its chips are made from semiconducting material called silicon carbide, which is seen as more efficient. As global demand for silicon carbide has swelled, so too has Wolfspeed.

Over the second half of last year, the company saw a 39% rise in net revenue from the same period in 2021. Last April, Wolfspeed opened a massive new chip fabrication facility in New York State’s Mohawk Valley, and in September, it announced an even larger materials plant coming to North Carolina.

Speaking to investors in January, CEO Gregg Lowe was bullish.

“It is clear to us that the opportunity in silicon carbide technology is generational given the pace of adoption we have experienced over the last few quarters,” he said. “(In October), I remarked that I have not seen growth like this in my 30 years in (semiconductors), and that view has not changed.”

A presidential visit should only accelerate the company’s profile. Ahead of Biden’s trip to the Triangle, here are four more things to know about Wolfspeed and its future.

The silicon carbide edge

Standard chips are made from silicon, but silicon carbide has been shown to be a more efficient semiconductor.

When used in electric car inverters, for example, silicon carbide can extend the vehicles’ range. In the past few years, Wolfspeed has entered agreements with automakers General Motors, Mercedes-Benz, and Jaguar Land Rover to supply their electric vehicle fleets.

But silicon carbide is very challenging to make. Wolfspeed grows its own supply at facilities in New York and North Carolina through a process that requires extreme heat. The company then cuts its silicon carbide into circular wafers, which it either sells to other semiconductor manufacturers or fabricates into chips itself.

According to the research firm Yole Group, Wolfspeed accounted for almost 60% of the global silicon carbide wafer market in 2019. The company says its market share remains around the same today.

When it comes to electric vehicle semiconductors, such sector dominance is uncommon for an American company. According to an April 2022 article in The Information, “China dominates the electric vehicle supply chain, from processing raw minerals like lithium into chemicals for batteries all the way to building finished cars.”

The one area “where America still has an edge,” the author stated, is in “chips made from an exotic material called silicon carbide.”

CHIPS Act (and child care)

In August, the federal government passed the CHIPS Act, which directs $52 billion to strengthen domestic production of semiconductors.

Chip manufacturing is seen as a matter of national security, as they’re found in vital devices like phones, medical equipment, military aircraft, and computers. A significant share of semiconductors comes from Taiwan, which has its sovereignty contested by mainland China.

Last summer, Lowe attended the White House signing ceremony celebrating the legislation’s passage. In September, John Palmour, Wolfspeed’s late chief technology officer and cofounder, told The News & Observer, “we would expect to get some support from the CHIPS Act.”

The company says its window to apply for CHIPS Act funding isn’t open yet.

“We can say that Wolfspeed is eager to collaborate with its partners in the federal government to help secure our supply chains, boost economic activity, and support national security,” company spokesperson Brianna Reeder said in an email. “We welcome the opportunity to work with the Biden administration to help produce and supply Silicon Carbide technology right here in the United States, supporting American jobs and innovation.”

To qualify for CHIPS Act funds, the federal government took the unique step of requiring recipients provide workers with access to affordable child care. This access is extended to the children of construction workers as well.

Asked if Wolfspeed was prepared to offer child care access to meet the federal rules, Reeder said the company is “still assessing the new requirements for the administration, but we feel good about where we stand given our alignment with the implementation priorities.”

Status of Wolfspeed’s Chatham site

In the coming years, Wolfspeed aims to produce more silicon carbide chips. Many more.

“We literally can’t make enough,” Palmour said. Since then, Wolfspeed has unveiled plans to build two new production factories, including a materials plant on the western edge of Chatham County.

The facility is slated to occupy 445 acres near Siler City and employ just over 1,800 workers by 2030. Wolfspeed executives predicted the wafer-making facility would expand the company’s current capacity by 10 times.

A contractor for the Wolfspeed project has submitted multiple building permits according to Chatham County spokesperson Kara Dudley, but no permits have been issued for permanent building construction. Dudley said the county has finished reviewing these permits and awaits additional air quality permits from the state before issuing them.

““We have issued a half dozen permits for various utility installations around the site,” she said.

Ongoing worker death investigation

The North Carolina Department of Labor continues to investigate Wolfspeed following the workplace death of Vincent Farrell, a 45-year-old facilities electrician from Durham who was electrocuted at a local Wolfspeed facility in October.

In a Jan. 31 statement to The N&O, the company said it “is unable to share specific information during this active investigation. We will continue to work closely with (the state Occupational Safety and Health division) as employee health and safety is a top priority for the company.”

Within the past decade, Wolfspeed — or Cree — has been cited for 17 workplace violations from four separate state inspections, the most recent found in 2015.

Due to short staffing and the complexity of severe incidents, the North Carolina Department of Labor says investigations into workplace fatalities typically last between three and six months after the accidents occurred.

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.

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