Department of War dishes out $1.5 billion loan commitment to boost semiconductor supply chain
Wolfspeed has secured a conditional $1.5 billion, 30-year loan commitment from the U.S. Department of War to expand GaN epitaxy and radiation-hardened SiC and GaN technologies for U.S. national security applications
The U.S. Department of War has committed $1.5 billion to U.S. semiconductor manufacturer Wolfspeed Inc. in a conditional 30-year loan, amid efforts to bolster domestic semiconductor manufacturing. Wolfspeed, which specializes in silicon carbide (SiC) and gallium nitride (GaN) devices, will use the funds to enhance its GaN epitaxy capabilities and develop radiation-hardening abilities for its SiC and future GaN products.
The company asserts that SiC and GaN technologies are crucial for next-generation power and radio-frequency applications in defense, aerospace, AI, critical infrastructure, and other strategic commercial markets, with a focus on U.S. national security applications. Wolfspeed CEO Robert Feurle emphasized the national security significance of SiC and GaN, adding that the financing would position the company to not only aid the Department of War but also bolster U.S. national security as a whole.
The loan, subject to final agreements, requires Wolfspeed to issue warrants to purchase up to 7.5% of its fully diluted equity. The loan remains conditional, pending the Office of Strategic Capital's due diligence and government approvals. The announcement underscores the U.S.'s ongoing strategy to onshore critical semiconductor manufacturing and strengthen the domestic supply chain, as part of the broader $54.2 billion CHIPS and Science Act, which has allocated billions for fabrication facilities and tax incentives.
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