Wolfspeed updates construction, hiring progress at Siler City plant. Here’s the latest.
In an upbeat earnings call Monday, the semiconductor producer Wolfspeed shared the status of its incoming $5 billion plant near Siler City.
Named after the company’s late cofounder, the John Palmour Manufacturing Center for Silicon Carbide is on schedule to begin producing material in the second half of next year said Wolfspeed CEO Gregg Lowe.
By the end of the decade, the Durham-based Wolfspeed has pledged to create just over 1,800 jobs at the western Chatham County site. “We’ve already hired and begun training more than 100 people that will work at that facility,” Lowe said.
The average minimum wage at the site will be $77,753, according to the economic incentive agreement between the company and state.
Wolfspeed chips are used to power appliances like electric vehicles and energy storage equipment. Unlike standard silicon chips, the company manufactures a distinct chip made from silicon carbide, which Wolfspeed touts as being more efficient.
First, Wolfspeeed grows its own silicon carbide crystals. The Siler City site will begin to cultivate crystals in the second half of 2024, said Wolfspeed chief financial officer Neill Reynolds.
The company then converts these crystals into blank wafers. Wolfspeed currently makes wafers on its main campus near Research Triangle Park in Durham, but Lowe said the John Palmour facility (known internally as “the JP”) will be “a substantially larger facility” than the Durham site.
Finally, Wolfspeed sends these blank wafers to a fabrication facility in Upstate New York’s Mohawk Valley where they are made into functioning chips. Wolfspeed also supplies wafers to other chipmakers.
Lowe said demand for silicon carbide chips continues to outpace supply, and the company has invested in two satellite sites (one in Durham and another in Texas) to help with production until the Siler City plant is ready.
“I really don’t anticipate a demand being below supply for any time in the future, really the next couple of years for sure and probably the next half a decade,” he said.
Boost to a struggling stock
In June, the company secured a key air quality permit that paved the way for construction to start in Siler City.
“We anticipate having our topping-out ceremony in the next month — symbolizing the tallest and last beam placed on the project,” said Wolfspeed spokesperson Melinda Walker.
Wolfspeed was founded in 1987 by a group comprising mostly North Carolina State University graduate students. Until recently, the company was called Cree and was best known for making LED lights. But starting five years ago, it ditched its lighting and LED divisions and steered resources toward silicon carbide chips.
The company changed its name to Wolfspeed in October 2021.
Silicon carbide is the company’s sole focus: In August, it sold its radio frequency division to MACOM Technology Solutions Holdings.
“Wolfspeed is now the only pure-play silicon carbide business in the marketplace, and we can focus all our collective efforts on the silicon carbide materials and power device businesses,” Reynolds told investors.
The earnings call late Monday afternoon boosted what had been a slumping stock. Wolfspeed share price was up 23% midday Tuesday, though the company’s stock has still dropped by almost 50% since the start of the year.
“Wolfspeed serves some exciting growth markets such as electric vehicles and 5G networking,” wrote an analyst for the financial outlet The Motley Fool. “But the inflation crisis caused slowdowns in demand for new cars and installation of 5G networks.”
“This company is a market leader in the production of these unusual semiconductor types and should remain in that pole position as the economy gets back on track,” the analyst added.
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