The deal, facilitated by the Defense Department’s Office of Strategic Capital, hinges on final agreements that will grant the government warrants to purchase up to 7.5% of the company's equity. Beyond silicon carbide, the funding targets upgrades to Wolfspeed’s gallium nitride epitaxy capabilities, a move Chief Executive Officer Robert Feurle described as a reinforcement of the firm's role in supplying critical hardware for defense applications.
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Wolfspeed Secures $1.5B Defense Department Loan for Chip Expansion
A conditional $1.5 billion financing commitment from the Pentagon marks a major bet on domestic semiconductor production, with Wolfspeed slated to receive 30-year capital to ramp up its output of silicon carbide materials and wide bandgap power devices essential for national security infrastructure.
Investors reacted sharply to the news, pushing Wolfspeed shares up 25% to $39.20 in after-hours trading. This surge follows a period of volatile performance, where the stock had previously seen an 80% gain year-to-date before Wednesday’s 1.5% dip. Feurle noted that the long-term capital provides the necessary stability to scale production, ensuring the company remains a primary supplier for the Department of Defense while broadening its influence in the U.S. technology sector.
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