Wolfspeed Inc.'s shares slumped about 49% on Friday, hitting their lowest since 1998, a day after the chipmaker appointed a new CEO amid its struggles to improve its financial position.

The company on Thursday named chip industry veteran Robert Feurle as its chief executive effective May 1, after it ousted top boss Gregg Lowe without cause in November.

Wolfspeed has been grappling with a slowdown in demand from automotive customers, which has crimped its profitability. In November, the company said it closed a 50mm device fabrication plant in Durham, North Carolina and was planning to lay off 20% of its employees.

Meanwhile, Wolfspeed is also waiting on about $750 million in federal funding under the U.S. CHIPS Act, the landmark 2022 bipartisan law which promised $52.7 billion in subsidies for domestic semiconductor chips manufacturing and production.

However, earlier this month, President Donald Trump said U.S. lawmakers should get rid of the law and use the proceeds to pay debt.

"Wolfspeed's CHIPS Act grant ended up being the highest-dollar CHIPS grant to not be officially awarded before Biden's exit, leaving it particularly vulnerable to being pulled under the new administration," said Brooks Idlet, senior analyst at CFRA Research.

Not receiving the grant "would be devastating for Wolfspeed, likely necessitating a substantial restructuring in order to preserve cash," Idlet said.

The CHIPS Act is critical for Wolfspeed as it provides essential funding to accelerate its silicon carbide semiconductor manufacturing expansion.

Shares of Wolfspeed were last trading at $2.81. Including the session's losses so far, the stock has lost more than 59% of its value this year.

According to estimates by Ortex, about 32.5% of Wolfspeed's free float was in short position as of March 27. A higher short interest indicates that the market expects the stock price to decline.