The Biden-Harris administration announced plans Tuesday to provide up to $750 million in direct funding to semiconductor developer and manufacturer Wolfspeed. The money will be used to support the company’s new silicon carbide factory in North Carolina that makes the wafers used in advanced computer chips and its factory in Marcy, New York.

In addition to the government grant, a group of investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company and Capital Group plan to provide an additional $750 million to Wolfspeed, the company said. Wolfspeed also expects to receive $1 billion from an advanced manufacturing tax credit, meaning the company in total will have access of up to $2.5 billion.

Wolfspeed stock surged Tuesday on the announcement of the combined $1.5 billion in funding. Shares were up 3 points, or 30%, as of noon ET.

Wolfspeed’s use of silicon carbide enables the computer chips used in electric vehicles and other advanced technologies to be more efficient. The North Carolina-based company’s two projects are estimated to create 2,000 manufacturing jobs as part of a more than $6 billion expansion plan.

“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, the Biden-Harris administration is taking a meaningful step towards reigniting U.S. manufacturing of the chips that underpin these important technologies,” Commerce Secretary Gina Raimondo said in a statement.

The new Wolfspeed facility in Siler City could be a critical symbol in this year’s election, as it opened earlier this year in a swing state county that is undergoing rapid economic expansion in large part due to incentives provided by the Biden-Harris administration.

Vice President Kamala Harris, the Democratic nominee, is making the case to voters that the administration’s mix of incentives are increasing factory work, while former President Donald Trump, the Republican nominee, says the threat of broad tariffs will cause overseas factories to relocate in the United States.

In 2023, President Joe Biden spoke at Wolfspeed to promote his economic agenda, saying it would help the United States outcompete China. Trump narrowly won North Carolina during the 2020 presidential election and has talked about bringing back the state’s furniture manufacturing sector.

The Biden administration helped shepherd the 2022 CHIPS and Science Act through Congress amid concern after the pandemic that the loss of access to chips made in Asia could plunge the U.S. economy into recession. Lawmakers at the time expressed concern about efforts by China to control Taiwan, which accounts for more than 90% of advanced computer chip production.

The Biden-Harris administration’s argument is that the government support encourages additional private investments, a case that appears to apply to Wolfspeed.

Wolfspeed CEO Gregg Lowe told The Associated Press that the United States currently produces 70% of the world’s silicon carbide — and that the investments will help the country preserve its lead as China ramps up efforts in the sector.

Lowe said “we’re very happy with this grant” and that the Commerce Department staff awarding funds from the CHIPS Act was “terrific.”