DURHAM – Durham-headquartered Wolfspeed has secured a conditional commitment for up to $1.5 billion in long-term U.S. government financing to support its capital structure and domestic production of silicon-carbide and gallium-nitride technologies.
Wolfspeed disclosed the commitment in an Oct. 7 filing with the U.S. Securities and Exchange Commission. The proposal from the U.S. Department of War’s Office of Strategic Capital contemplates a senior secured delayed-draw term loan facility with an expected 30-year maturity and a 36-month commitment period.
The facility would begin with a $600 million initial tranche and provide up to $900 million in later tranches. Wolfspeed said the first tranche would refinance its first-lien notes due in 2030, while subsequent tranches would support domestic production of silicon-carbide and gallium-nitride technologies.
The proposed production work includes silicon-carbide wafers and power devices, domestic or onshored gallium-nitride production, gallium-nitride-on-silicon-carbide radio-frequency epitaxial wafer technology and radiation-hardening capabilities for defense applications.
The commitment is not a guarantee that Wolfspeed will receive the money. Funding remains subject to due diligence, definitive agreements, government approvals, appropriations, third-party consents, commercial or offtake arrangements and other conditions. Wolfspeed also must assemble at least $750 million in qualifying sources, including specified equity and other eligible contributions, and satisfy specified debt-related requirements.
The proposal calls for the loan to carry a rate comparable to Treasury securities of similar duration plus a provisional risk premium of 1.25 to 1.75 percentage points. Interest could be capitalized during the first five years, followed by 25 years of amortization.
If the facility funds, the government would receive warrants representing up to 7.5% of Wolfspeed’s fully diluted equity. Reuters independently reported that Wolfspeed shares rose about 27% in extended trading after the announcement, reflecting the scale of the possible financing even as the conditions leave execution risk.
For North Carolina, the proposal could materially reshape the finances of a Durham-headquartered public semiconductor manufacturer and support its domestic production platform. The filing does not assign a specific share of the potential funding or a guaranteed job total to North Carolina, and no financing should be treated as final until the conditions are satisfied and definitive agreements are signed.