Key takeaways
- Wolfspeed receives a conditional $1.5 billion U.S. government loan commitment.
- Funding will expand domestic silicon carbide and gallium nitride production.
- The deal could give the government warrants for 7.5% of Wolfspeed’s equity.
Wolfspeed said Wednesday it received a conditional commitment for up to $1.5 billion in U.S. government financing to expand domestic silicon carbide and power-device production and support national security technologies, sending its shares up 27% in after-hours trading.
Loan targets U.S. chip production
The 30-year Wolfspeed Government Loan commitment comes through the Office of Strategic Capital and is designed to support Wolfspeed’s domestic production of silicon carbide materials and wide-bandgap power devices. The company said the financing would strengthen its manufacturing base in the United States.
Silicon carbide chips can handle high levels of power and operate more efficiently than traditional silicon-based devices in some applications. Wolfspeed supplies the technology for markets including electric vehicles, energy systems, industrial equipment, aerospace and defense.
Robert Feurle, Wolfspeed’s chief executive, said silicon carbide and gallium nitride have important national security uses.
“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,” Feurle said.
Wolfspeed plans defense technology upgrades
Wolfspeed plans to use the potential financing to upgrade gallium nitride technology for next-generation communications infrastructure and electronic warfare systems. It also plans to develop radiation-hardening capabilities for current silicon carbide products and future gallium nitride products.
The company also expects the financing to support additional domestic production of gallium nitride power devices and advance gallium-nitride-on-silicon-carbide technology for radio-frequency applications. Wolfspeed operates manufacturing facilities in North Carolina, New York and Arkansas.
The commitment is conditional and does not guarantee that Wolfspeed will receive the full $1.5 billion. The Wolfspeed Government Loan remains subject to due diligence, final agreements, government approvals, appropriations and other conditions.
Deal includes equity warrants
Under the proposed Wolfspeed Government Loan terms, Wolfspeed would issue warrants to the U.S. government that could allow it to purchase up to 7.5% of the company’s fully diluted equity. The warrants would be issued as financing tranches are funded, subject to final agreements.
Wolfspeed said the financing would also strengthen its balance sheet after a series of efforts to reduce debt and improve its financial position. In March, the company raised about $475.9 million through convertible notes, common stock and pre-funded warrants, using the proceeds to reduce higher-cost debt.
Chief Financial Officer Gregor van Issum called the potential financing another step in the company’s effort to improve its capital structure.
“Subject to the satisfaction of diligence, negotiation of definitive agreements, and other financial, legal, and investment conditions,” the financing is expected to provide long-term capital and improve Wolfspeed’s financial flexibility, van Issum said.
Wolfspeed emerged from Chapter 11 restructuring in 2025 after a court-approved plan called for a major reduction in its debt. The company has since focused on strengthening its finances while expanding silicon carbide technology for defense, energy, industrial and artificial intelligence applications.
