The U.S. Department of War has issued a conditional loan commitment of $1.5 billion to Wolfspeed. This 30-year agreement is intended to bolster the domestic semiconductor supply chain, with a specific focus on silicon carbide and gallium nitride technologies for national security applications.
Wolfspeed plans to utilize the funding to support defense, aerospace, and AI sectors, including the development of communications infrastructure and electronic warfare systems. According to CEO Robert Feurle, the financing will allow the company to expand its capabilities for U.S. national security needs.
The deal remains subject to final agreements, due diligence, and government approvals. As part of the terms, Wolfspeed must issue warrants to the Department of War, allowing the agency to purchase up to 7.5% of the company's fully diluted equity. The price of these warrants will be based on the volume-weighted average price of the stock.
This initiative is part of a broader U.S. strategy to onshore critical semiconductor manufacturing. The government has previously allocated $54.2 billion through the CHIPS and Science Act to support major industry players, alongside a 25% tax credit that has reportedly spurred over $827 billion in private sector investments.
