Wolfspeed Inc ( WOLF ) shares are trading higher Tuesday after the company announced new proposed funding under the CHIPS and Science Act.

What Happened: Wolfspeed ( WOLF ) and the U.S. Department of Commerce signed a non-binding preliminary memorandum of terms for up to $750 million in proposed direct funding under the CHIPS and Science Act.

A consortium of investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company and Capital Group have also agreed to provide Wolfspeed ( WOLF ) an additional $750 million of new financing.

In addition, Wolfspeed ( WOLF ) expects to receive $1 billion of cash tax refunds from the advanced manufacturing tax credit under the CHIPS and Science Act, giving the company access to up to $2.5 billion of expected capital in total.

The investments are aimed at supporting Wolfspeed’s long-term growth plans and bolstering U.S. production of silicon carbide to power clean energy systems.

“This support galvanizes our ability to expand domestic manufacturing, accelerate innovation in next-generation semiconductor technology, and meet the increasing global demand for silicon carbide,” said Gregg Lowe, CEO of Wolfspeed ( WOLF ).

“As a key player in the semiconductor industry, this proposed investment will enable us to solidify our leadership position with a first-of-its-kind 200mm silicon carbide manufacturing footprint in upstate New York and central North Carolina, while contributing to the resilience and competitiveness of the U.S. supply chain.”

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The proposed funds are expected to be received upon milestone achievements over the coming years and would enable Wolfspeed ( WOLF ) to complete its multi-billion-dollar greenfield U.S. capacity expansion plan. The investment will also help bolster Wolfspeed’s balance sheet and accelerate its long-term profitability goals.

U.S. Secretary of Commerce Gina Raimondo said, “Artificial intelligence, electric vehicles, and clean energy are all technologies that will define the 21st century, and thanks to proposed investments in companies like Wolfspeed ( WOLF ), the Biden-Harris Administration is taking a meaningful step towards reigniting U.S. manufacturing of the chips that underpin these important technologies.”

WOLF Price Action: Wolfspeed ( WOLF ) shares were up 24.$% at $14.16 at the time of publication Tuesday, according to Benzinga Pro.