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The U.S. Department of War announced on Oct. 7 that Wolfspeed Inc. has received a conditional 30-year loan commitment for $1.5 billion through its Office of Strategic Capital. This financing aims to help the company upgrade its gallium nitride epitaxy capabilities and develop radiation hardening features for silicon carbide and future gallium nitride products. The funds are intended to support applications in defense, aerospace, artificial intelligence, and critical infrastructure.

Wolfspeed CEO Robert Feurle stated that these materials are critical for national security, particularly in communications and electronic warfare systems. Under the loan terms, Wolfspeed must issue warrants to purchase up to 7.5% of its fully diluted equity, priced based on the stock’s volume-weighted average price. The deal remains conditional pending final agreements, government approvals, and consent from existing lenders.

This announcement is part of a broader effort under the $54.2 billion CHIPS and Science Act to strengthen domestic semiconductor manufacturing. The act includes tax incentives that have led to over $827 billion in private sector investment announcements. Wolfspeed CFO Gregor van Issum noted that, subject to due diligence and other conditions, the commitment will provide long-dated capital to improve financial flexibility and support strategic priorities.