THE CRUNCH
Wolfspeed has received a conditional 30-year, $1.5 billion loan commitment from the U.S. Department of War through its Office of Strategic Capital, according to an official press release dated 7 October. The company, which makes silicon carbide (SiC) and gallium nitride (GaN) materials and devices, would use the financing to upgrade its GaN epitaxy capabilities and develop radiation hardening for current SiC and future GaN products.
Wolfspeed says it will focus on U.S. national security applications, including communications infrastructure and electronic warfare systems. CEO Robert Feurle said SiC and GaN have critical national security applications and that the financing would position the company to serve the Department of War and expand its capabilities for U.S. national security more broadly.
The deal comes with strings attached. Wolfspeed must issue the Department of War warrants to buy up to 7.5% of its fully diluted equity, priced off the stock's volume-weighted average price and delivered in proportion to each funded tranche of the loan.
The commitment remains conditional, pending the Office of Strategic Capital's due diligence, government approvals and appropriations, and the consent of Wolfspeed's existing lenders. The company itself cautions there is no guarantee the financing will go through.
The move is the latest in a broader U.S. push to onshore chipmaking. Through the $54.2 billion CHIPS and Science Act, the government has funded fabrication plants for TSMC, Intel, GlobalFoundries and Micron, while the Section 48D tax credit of 25% has been credited with spurring over $827 billion in private sector announcements.