Wolfspeed Takes Biggest Hit Among Semiconductor Stocks After CHIPS Funding Reportedly Comes Under Fire – Retail Isn’t Panicking

Shares of Wolfspeed (WOLF) fell nearly 6% by Tuesday noon, making it one of the worst-performing semiconductor stocks after a Bloomberg report suggested the company could lose access to promised Chips Act grants. 

The decline came amid broader market weakness ahead of President Donald Trump’s reciprocal tariffs, set to take effect Wednesday.
According to Bloomberg, Commerce Secretary Howard Lutnick has indicated he may withhold Chips Act grants as he presses semiconductor companies to expand their U.S. manufacturing investments. 

The report suggests that Lutnick aims to leverage federal subsidies to encourage firms to pursue larger domestic projects.

The uncertainty comes after President Trump signed an executive order Monday directing the Commerce Department to negotiate "much better Chips Act deals than the previous administration." 

The order created the United States Investment Accelerator, an office within Commerce tasked with facilitating projects exceeding $1 billion and overseeing semiconductor subsidies.

Lutnick reportedly wants 2022 Chips and Science Act funding recipients to follow Taiwan Semiconductor Manufacturing Co.'s (TSMC) (TSM) lead.

The Taiwanese chip giant recently pledged an additional $100 billion for U.S. plants on top of its previous $65 billion commitment. 

While the Commerce chief has suggested canceling disbursements to companies failing to meet new investment expectations, Bloomberg's sources say he has also expressed interest in expanding a 25% tax credit from the Chips Act. 

The Commerce Department has not publicly addressed the report.

Several companies reached preliminary funding agreements under the Biden administration but did not finalize their deals. 

Among them is Wolfspeed, which announced last week that its $750 million grant arrangement is “likely to evolve” but offered no additional details after the stock tanked on Monday’s speculation that Wolfspeed could potentially lose critical semiconductor subsidies and face bankruptcy.

Other major semiconductor firms expected to receive more than $1 billion in Chips Act funding include Intel (INTC), Micron Technology (MU), GlobalFoundries (GFS), and Texas Instruments (TXN). 

On Stocktwits, retail sentiment around Wolfspeed’s stock dipped lower but remained in ‘extremely bullish’ territory, accompanied by ‘extremely high’ levels of chatter.

Some users believe the administration’s shifting approach to the Chips Act could ultimately benefit Wolfspeed.

Wolfspeed shares have lost over 90% in the past 12 months and are down over 56% in 2025.

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Read also: Wolfspeed Crash Wipes Out Nearly Half Its Market Cap Amid CHIPs Act Funding, Bankruptcy Speculation – Retail Traders Brace For More Losses