Wolfspeed has received a conditional loan commitment letter from the US Department of War, through its Office of Strategic Capital, for up to $1.5 billion of long-term financing to support domestic development and production of silicon carbide materials and wide bandgap power devices, with an additional focus on national security applications. The company announced the commitment on October 7 from its Durham, North Carolina headquarters.
The proposed facility runs up to four tranches over a 30-year term with a 36-month commitment period for drawing funds. The first tranche would provide $600 million to refinance Wolfspeed’s first-lien senior secured notes due in 2030, plus transaction fees and expenses. Under the proposed terms, Wolfspeed would issue the department warrants to purchase up to 7.5 percent of its fully diluted equity, giving the government an ownership option alongside the debt. Shares surged 27 percent in extended trading on the announcement.
Beyond refinancing, the money funds a multi-year program: upgrading gallium nitride epitaxy capabilities for next-generation communications infrastructure and electronic warfare systems, and developing radiation-hardening capabilities for current SiC and future GaN products. Chief executive Robert Feurle said SiC and GaN have critical national security applications.
The minimum contribution requirement is $750 million, which can be met with qualifying equity or equity-linked instruments, excess cash, converted debt and other items at the office’s discretion, with at least $150 million required for the initial tranche and $600 million for later ones. Wolfspeed said the financing would let it optimize its capital structure and strengthen its financial foundation.