Wolfspeed Gets Conditional $1.5 Billion Federal Loan Commitment

Wolfspeed said it received a conditional commitment for up to $1.5 billion in federal financing to support domestic semiconductor production, a proposed deal that would give the U.S. Department of War warrants for up to 7.5% of the company’s fully diluted equity as loan funds are released. The commitment, announced October 7 through the department’s Office of Strategic Capital, is structured as a proposed 30-year senior secured facility. Wolfspeed said it intends to use the financing to expand U.S. production of silicon carbide materials and power devices, and to upgrade gallium nitride capabilities for communications infrastructure and electronic warfare systems. The company also plans to develop radiation-hardening capabilities for silicon carbide and future gallium nitride products. The financing is not final. Wolfspeed said it remains subject to due diligence, definitive agreements, government approvals and other conditions, and there is no assurance that funds will be provided. The proposed terms call for warrants to be issued in stages as loan tranches are funded, rather than granting the government an immediate ownership stake.