Wolfspeed received a conditional commitment from the U.S. Department of War for up to $1.5 billion in long-term financing to support domestic production of silicon carbide materials and wide bandgap power devices, with an additional focus on U.S. national security applications.
The financing would be provided through the Department of War’s Office of Strategic Capital and is structured as a senior secured delayed-draw term loan facility with a 30-year tenor.
Wolfspeed plans to use the potential financing to strengthen its U.S. semiconductor manufacturing capabilities across silicon carbide and gallium nitride technologies.
The company said the financing could support upgrades to its gallium nitride epitaxy capabilities for next-generation communications infrastructure and electronic warfare systems.
It also plans to develop radiation-hardening capabilities for existing silicon carbide products and future gallium nitride products.
Wolfspeed said silicon carbide and related semiconductor technologies are increasingly important across defense, aerospace, artificial intelligence, critical infrastructure, and other strategic commercial markets.
The company’s domestic manufacturing footprint includes operations in North Carolina, New York, and Arkansas.
The financing is expected to support a multi-year program to strengthen Wolfspeed’s leadership in U.S. silicon carbide materials and power devices.
Wolfspeed also plans to establish, expand, or onshore domestic low-voltage and high-voltage gallium nitride power-device production capabilities.
Additional priorities include advancing GaN-on-SiC radio-frequency epitaxial wafer technology and developing domestic radiation-hardening capabilities.
The company said the financing would also strengthen its capital structure and provide additional long-duration funding for strategic investments.
Under the contemplated structure, Wolfspeed would be required to issue warrants to the Department of War representing up to 7.5% of the company’s fully diluted equity.
Those warrants would be issued on a pro rata basis as financing tranches are funded.
The transaction remains subject to substantial due diligence, negotiation and execution of definitive agreements, governmental approvals, appropriations, third-party consents, and other closing conditions.
Wolfspeed said there is no assurance that definitive agreements will be completed or that the financing will ultimately be funded.
The conditional commitment represents another step in Wolfspeed’s broader effort to strengthen its financial foundation while expanding its role in the domestic wide bandgap semiconductor supply chain.
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“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
“We believe the scale and 30-year tenor of this conditional commitment reflects the long-term importance of the technology and manufacturing capabilities Wolfspeed has built in the United States. This financing would strengthen our continued advancement of silicon carbide materials and wide bandgap power devices, reinforcing our efforts to build a more resilient U.S. semiconductor and defense industrial base.”
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. Subject to the satisfaction of diligence, negotiation of definitive agreements, and other financial, legal, and investment conditions, the broader commitment is expected to provide additional long-dated capital to support our strategic priorities, improve financial flexibility, and further position Wolfspeed for long-term value creation.”
Gregor van Issum, Chief Financial Officer of Wolfspeed
