Wolfspeed cuts more jobs as Trump calls CHIPS Act "horrible"
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Wolfspeed's under-construction materials facility in Siler City. Photo: Zachery Eanes/Axios
Wolfspeed, the Durham-based semiconductor firm building a $5 billion plant in Chatham County, is cutting jobs once again.
Why it matters: Wolfspeed — one of the state's largest tech companies and previously known as Cree — has struggled in its transition from an LED lighting company into one purely focused on producing silicon carbide semiconductors.
- The company's chips are a popular component in electric vehicles, but a slowing of demand for those vehicles and production issues at its factories have put pressure on the company's finances.
State of play: In the past year, the company has already fired its CEO, closed one of its factories and cut 20% of its workforce in response to shares of its stock plummeting more than 90% since peaking during the pandemic.
The latest: On Friday, Wolfspeed revealed in a filing with the U.S. Securities and Exchange Commission that it would be cutting another 180 jobs — mainly at its facilities in Durham and Siler City.
- The company said it is looking to lower capital expenditures by $150 million to $200 million in the next year and by $30 million to $50 million in 2027.
Between the lines: The move comes as the company nears the opening date of its new materials plant in Siler City, a massive facility the state and local governments have pledged $700 million in incentives to if it meets hiring goals.
- The facility, which could employ up to 1,800 workers in the coming years, was expected to be boosted by $750 million from the Biden administration's CHIPS Act legislation.
A spokesperson for the company told Axios on Friday that Wolfspeed remains committed to hiring 1,800 workers at Siler City.
- "As market demand increases, we will increase headcount at [Siler City], with the expectation that we will still reach our forecasted employee base of 1,800 at the site," the spokesperson said in an email.
Threat level: The future of that grant, which had already been approved for Wolfspeed, appears to be in jeopardy.
- Wolfspeed previously said it was still in negotiations with the Trump administration on finalizing the grant.
- But President Trump called for getting rid of the CHIPS Act during his speech before Congress this week, saying the bill was a "horrible, horrible thing."
- In its securities filing, the company said that even without the CHIPS Act funding, it is hopeful its restructuring of the company will return it to positive free cash flow — a measure of how much money a company has left over after paying expenses — in 2027.
What they're saying: "Changes to our workforce are not something we take lightly," a Wolfspeed spokesperson told Axios in a statement. "We believe these actions will continue to strengthen the company's financial foundation and enable us to deliver a much stronger future for all of our stakeholders."