During a lively earnings call on Monday, Wolfspeed, a semiconductor manufacturer, provided an update on its forthcoming $5 billion plant located near Siler City. Named in honor of the company’s late co-founder, the John Palmour Manufacturing Center for Silicon Carbide is on track to commence material production in the second half of the upcoming year, as affirmed by Wolfspeed’s CEO, Gregg Lowe.

Over the course of the next decade, Wolfspeed, headquartered in Durham, has made a commitment to generate more than 1,800 job opportunities at their site in western Chatham County. Lowe stated, “We’ve already recruited and initiated the training of over 100 individuals who will be part of the workforce at that facility.”

According to the economic incentive agreement between the company and the state, the site’s minimum wage will average $77,753.

Wolfspeed chips are integral in powering devices such as electric vehicles and energy storage equipment. What sets them apart is their use of silicon carbide, which is renowned for its efficiency, in contrast to conventional silicon chips.

Wolfspeed initiates the production process by growing their own silicon carbide crystals. The cultivation of these crystals will commence at the Siler City site in the latter half of 2024, according to Neill Reynolds, Wolfspeed’s Chief Financial Officer.

Subsequently, these crystals are transformed into blank wafers. While Wolfspeed currently manufactures wafers at its primary campus near Research Triangle Park in Durham, Lowe mentioned that the John Palmour facility, often referred to internally as “the JP,” will be considerably larger than the Durham site.

Finally, these blank wafers are transported to a fabrication facility in Upstate New York’s Mohawk Valley, where they are transformed into functional chips. Wolfspeed also supplies wafers to other chip manufacturers.

Lowe emphasized that the demand for silicon carbide chips continues to outstrip the supply, prompting the company to invest in two satellite sites, one in Durham and another in Texas, to support production until the Siler City plant is fully operational. “I really don’t anticipate supply surpassing demand in the foreseeable future, at least for the next couple of years, and likely the next half-decade,” he remarked.

The company achieved a significant milestone in June when it secured a crucial air quality permit, allowing construction to commence in Siler City. According to Wolfspeed spokesperson Melinda Walker, a topping-out ceremony is expected in the coming month, marking the placement of the project’s tallest and final beam.

Wolfspeed was originally established in 1987 by a group primarily composed of North Carolina State University graduate students. Until recently, the company was known as Cree and was renowned for its production of LED lights. However, five years ago, it shifted its focus away from lighting and LED divisions, concentrating its resources on silicon carbide chips.

In October 2021, the company rebranded itself as Wolfspeed. Silicon carbide became its sole focus, leading to the sale of its radio frequency division to MACOM Technology Solutions Holdings in August.

Reynolds informed investors, “Wolfspeed is now the only pure-play silicon carbide business in the marketplace, and we can direct all our collective efforts toward the silicon carbide materials and power device businesses.”

The upbeat earnings call on Monday afternoon provided a much-needed boost to the company’s previously declining stock. Wolfspeed’s share price saw a 23% increase by midday Tuesday, although the company’s stock had still experienced a nearly 50% drop since the beginning of the year.

An analyst from the financial outlet The Motley Fool remarked, “Wolfspeed serves some exciting growth markets such as electric vehicles and 5G networking. But the inflation crisis caused slowdowns in demand for new cars and installation of 5G networks.”

The analyst added, “This company is a market leader in the production of these unique semiconductor types and should remain in that pole position as the economy gets back on track.