Wolfspeed has secured a conditional commitment from the US Department of War for a loan facility of up to $1.5 billion. The financing is structured as a 30-year senior secured delayed-draw term loan, aimed at bolstering domestic production of silicon carbide materials and wide bandgap power devices.
The funds are intended to support several strategic initiatives, including the enhancement of gallium nitride epitaxy capabilities for communications and electronic warfare systems. Additionally, the program covers the development of radiation-hardening technologies for silicon carbide and gallium nitride products, alongside the expansion of domestic manufacturing for power devices.
Under the terms of the commitment letter from the Office of Strategic Capital, Wolfspeed would be required to issue warrants to the Department of War for up to 7.5 percent of its fully diluted equity as loan tranches are funded. The agreement remains subject to due diligence, final contract execution, and government approvals.
CEO Robert Feurle noted that the 30-year tenor of the loan underscores the long-term significance of the company's manufacturing capabilities. However, the company cautioned that there is no guarantee that the financing will be finalized or provided, as the commitment is conditional on meeting various regulatory and operational requirements.
