Shares of Wolfspeed (WOLF) soared nearly 25% Tuesday when the maker of high-speed semiconductors reported it could receive as much as $2.5 billion in funding under the CHIPS and Science Act of 2022, and from an investment group.

The company noted that the U.S. Department of Commerce has proposed $750 million in direct funding from the CHIPS Act, and that it expects $1.0 billion in refunds from the tax credit included in the legislation. 

It also announced that a consortium of investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company, and Capital Group agreed to provide an additional $750 million.

Wolfspeed explained that it would use the money to expand domestic manufacturing of chips with its silicon carbide technology, which the company calls “a superior alternative to silicon” for high-power applications, including “EV powertrains, e-mobility, renewable energy systems, battery energy storage systems, and AI and cryptocurrency data centers.”

‘Meaningful Step’ To Help Reignite Domestic Chip Manufacturing

Commerce Secretary Gina Raimondo said federal investment in firms like Wolfspeed are “a meaningful step towards reigniting U.S. manufacturing of the chips” behind technologies such as AI, EVs, and clean energy.

Apollo Partner Joseph Jackson added that the firm believes “Wolfspeed is at the forefront of a critical transformation in sustainable transportation and ensuring that the company has durable capital access to complete its expansion plans will help solidify its leadership in this space.”

Even with today’s jump, Wolfspeed shares have lost two-thirds of their value this year.