Wolfspeed Shares Crash Amid Doubts Over CHIPS Act Grant Approval

Shares of Wolfspeed experience a sharp decline amid concerns over CHIPS Act funding.

Wolfspeed’s stock experienced a plunge of close to 50 percent in trading on Friday, triggering a response from investors due to indications that the company may not secure the expected federal funding outlined in the CHIPS Act of 2022.

The market reacted to statements made by Thomas Werner, who is stepping down as the Executive Chairman, indicating that the company is adjusting its strategy to reduce reliance on government funding. This has led to concerns about Wolfspeed’s capability to secure the anticipated $750 million in assistance and an extra $1 billion in tax-related benefits.

Wolfspeed had previously established a deal with the U.S. Department of Commerce for funding to support its growth initiatives in both North Carolina and New York. In addition to the government support, the company aimed to secure $750 million in investments from other sources.

The timing of this uncertainty coincides with changes in leadership at the Wolfspeed company. It was revealed on Thursday that Robert Feurle from Micron Technology will take over as CEO starting May 1st. Werner, who temporarily filled the role after Gregg Lowe’s departure in November, will go back to being the Chairman of the Board.

Wolfspeed has been working on making its operations more efficient and making changes internally due to challenges and fluctuations in the industry sector. It recently observed a drop in stock prices that brought it near record lows amidst rising chip manufacturing costs and stricter timelines.

For traders and investors alike, this serves as a warning sign to be wary of funding influences that can swiftly alter market sentiment at markets like yours. Monitor closely how company leadership adapts in the quarters with changes in investment patterns between public and private sectors within the technology industry. Stay updated and flexible in your approach.