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Investing.com -- Wolfspeed Inc (NYSE:WOLF) stock surged 10.4% in Monday’s premarket trading after the silicon carbide technology company announced it received $698.6 million in cash tax refunds from the Internal Revenue Service.
The refund comes from the Advanced Manufacturing Investment Credit under Section 48D of the Internal Revenue Code and represents a significant portion of approximately $1 billion in expected tax refunds. The company had previously received $186.5 million in cash tax refunds related to its fiscal 2023 and 2024 federal tax filings.
Following receipt of these funds, Wolfspeed’s cash balance has increased to approximately $1.5 billion, strengthening its financial position as it ramps up its 200mm silicon carbide manufacturing capabilities.
"This substantial cash infusion further strengthens our liquidity position at a critical phase in Wolfspeed’s strategic evolution," said Wolfspeed CFO, Gregor Van Issum. "It provides us with the financial agility to support long-term growth, manage our capital structure responsibly, and continue driving innovation across the silicon carbide value chain for our customers."
The company plans to allocate $192.2 million of the refund toward retiring approximately $175 million of outstanding debt, with the remaining funds designated for general corporate purposes.
Wolfspeed has been investing heavily in establishing a vertically integrated, U.S.-based supply chain for silicon carbide materials and power devices. The company is focusing on diversifying its power device revenue into growing segments including AI data centers, aerospace and defense, and industrial and energy, while continuing to support the electric vehicle market.
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