Wolfspeed received a conditional commitment from the U.S. Department of War’s Office of Strategic Capital for up to $1.5 billion in long-term financing.
The proposed financing would support domestic production and development of silicon carbide materials and wide bandgap semiconductor devices.
The funding would also support national security applications involving gallium nitride technology.
Wolfspeed plans to use the financing to upgrade GaN epitaxy capabilities for next-generation communications and electronic warfare applications.
The company also plans to develop radiation-hardening capabilities for current silicon carbide products and future GaN products.
Additional initiatives include strengthening domestic silicon carbide materials and power-device manufacturing, expanding U.S. GaN power-device production, and advancing GaN-on-SiC radio-frequency epitaxial wafer technology.
Wolfspeed operates domestic manufacturing infrastructure in North Carolina, New York, and Arkansas.
The conditional commitment contemplates a senior secured delayed-draw term loan facility with a 30-year tenor.
As part of the proposed financing, Wolfspeed would be required to issue warrants to the Department of War representing up to 7.5% of the company’s fully diluted equity.
The warrants would be issued proportionally as financing tranches are funded.
The financing remains subject to diligence, negotiation of definitive agreements, governmental approvals, third-party consents, and other financial and legal conditions.
KEY QUOTES:
“SiC and GaN have critical national security applications. With this financing, the company would be well positioned to not only continue to serve the DoW but also expand its capabilities for the benefit of U.S. national security as a whole.”
Robert Feurle, Chief Executive Officer of Wolfspeed
“This conditional 30-year commitment represents another significant milestone in our ongoing efforts to optimize Wolfspeed’s capital structure and improve our financial foundation.”
Gregor van Issum, Chief Financial Officer of Wolfspeed
