Investing.com -- Wolfspeed (NYSE: WOLF )’s stock experienced a significant drop of about 48% on Friday, reaching its lowest level since 1998. This decline came a day after the chipmaker announced the appointment of a new CEO, as the company grapples with financial challenges.

The chip industry veteran, Robert Feurle, was named as the new chief executive, effective May 1. This decision followed the removal of the former top boss, Gregg Lowe, in November without a specified cause.

Wolfspeed has been wrestling with a decrease in demand from its automotive clients, negatively impacting its profitability. The company disclosed in November that it had shut down a 50mm device fabrication plant in Durham, North Carolina, and was planning to lay off 20% of its workforce.

In addition to its internal struggles, Wolfspeed is awaiting approximately $750 million in federal funding under the U.S. CHIPS Act. This 2022 bipartisan law pledged $52.7 billion in subsidies for domestic semiconductor chip manufacturing and production.

However, earlier this month, President Donald Trump suggested that U.S. lawmakers should abolish the law and use the funds to pay off debt. This situation leaves it especially susceptible to being withdrawn by the new administration. The CHIPS Act funding is crucial for Wolfspeed as it would support the acceleration of its silicon carbide semiconductor manufacturing expansion.

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