Wolfspeed has received a conditional US Department of War (DoW) commitment for up to $1.5 billion in 30-year financing to support domestic development and production of silicon carbide (SiC) materials and wide bandgap power devices.
The financing is intended to advance DoW initiatives, including upgrading Wolfspeed’s gallium nitride (GaN) epitaxy capabilities for communications infrastructure and electronic warfare systems and developing radiation-hardening capabilities for its current SiC and future GaN products. It would also support a multi-year program that includes establishing, expanding or onshoring domestic production capabilities for low-voltage or high-voltage GaN power devices, or both.
The commitment letter, from the DoW’s Office of Strategic Capital, contemplates a senior secured delayed-draw term loan facility. If definitive agreements are signed, Wolfspeed would be required to issue warrants to the DoW for up to 7.5% of its fully diluted equity, pro rata as loan tranches are funded.
Funding is subject to due diligence, definitive agreements, government approvals and appropriations, among other conditions. Wolfspeed says there is no assurance that any financing will be provided.
“We believe the scale and 30-year tenor of this conditional commitment reflects the long-term importance of the technology and manufacturing capabilities Wolfspeed has built in the United States,” said Wolfspeed CEO Robert Feurle. “This financing would strengthen our continued advancement of silicon carbide materials and wide bandgap power devices, reinforcing our efforts to build a more resilient US semiconductor and defense industrial base.”
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