Wolfspeed has received a conditional commitment letter for a 30-year, $1.5 billion loan from the U.S. Department of War's Office of Strategic Capital. The company, which makes silicon carbide and gallium nitride materials and devices, says it will use the long-term financing to upgrade its GaN epitaxy capabilities and develop radiation hardening for existing SiC and future GaN products. These technologies are aimed at defense, aerospace, AI, critical infrastructure, and other strategic commercial markets, with a focus on communications infrastructure and electronic warfare.
The loan remains conditional. The OSC must complete due diligence, and Wolfspeed needs government approvals, appropriations, and consent from its existing lenders. If finalized, the DoW will receive warrants to buy up to 7.5% of Wolfspeed's fully diluted equity, priced off the stock's volume-weighted average price and issued proportionally as each loan tranche is funded. Both the CEO and CFO framed the commitment as a step toward strengthening the company's capital structure and national security role.
The commitment is part of a wider U.S. push to onshore semiconductor manufacturing. Through the $54.2 billion CHIPS and Science Act and a 25% tax credit under Section 48D, the government has already helped attract over $827 billion in private sector announcements. Wolfspeed's loan would add a direct, long-dated government investment in a niche but strategically important chip segment.