Wolfspeed gets conditional $1.5 billion Department of War loan commitment, would grant warrants for up to 7.5% of company

Wolfspeed has lined up a conditional offer of up to $1.5 billion in long-term government financing, and the government would receive a potential equity stake in return. The silicon carbide chipmaker said Wednesday it signed a conditional commitment letter with the U.S. Department of War, acting through its Office of Strategic Capital.

The contemplated senior secured delayed-draw term loan is expected to carry a 30-year maturity. As a condition of the deal, Wolfspeed would issue the department warrants to buy up to 7.5% of its fully diluted equity, handed over pro rata as each loan tranche is funded.

Nothing is final yet. Wolfspeed said there can be "no assurance" that definitive agreements will be signed or that any financing will be provided.

How the money would flow

The facility would come in up to four tranches: $600 million at the start and $900 million more in tranches of $200 million to $400 million, available over a 36-month commitment period. The initial tranche would refinance in full Wolfspeed's first lien senior secured notes due 2030 and pay transaction costs. Later draws would fund a project covering domestic silicon carbide wafer and power device production, gallium nitride production, GaN-on-SiC radio-frequency wafer technology and radiation hardening.

Interest is expected to equal a comparable-maturity Treasury rate plus a risk premium provisionally set between 1.25% and 1.75%. For the first five years, interest could be added to principal; after that, the loan would amortize over 25 years.

The strings attached

To get there, Wolfspeed must use commercially reasonable efforts to convert a substantial majority of its outstanding convertible notes into equity, obtain satisfactory amendments or waivers under certain existing debt agreements, and sign letters of intent or offtake agreements acceptable to the office. The department also needs congressional authorizations, available appropriations and sign-off from the Office of Management and Budget.

Wolfspeed would need to contribute at least $750 million from qualifying sources, such as new equity, received after June 28, 2026, including $50 million of third-party equity raised before the facility takes effect. The terms would also require a majority-U.S.-citizen board and a U.S. headquarters, and would give the office a non-voting board observer.

"SiC and GaN have critical national security applications," CEO Robert Feurle said in the release.

Wolfspeed shares closed Wednesday's regular session at $31.37, down 1.4%. The company filed the 8-K describing the commitment after the closing bell.

By the numbers

• Maximum loan: $1.5 billion, in up to four tranches
• Initial tranche: $600 million
• Expected maturity: 30 years
• Provisional risk premium over Treasuries: 1.25% to 1.75%
• Warrants to the Department of War: up to 7.5% of fully diluted equity
• Required minimum contribution: $750 million

Sources

1. Wolfspeed, Inc. Form 8-K (Items 7.01, 8.01 and 9.01), filed Oct. 7, 2026, accession 0001193125-26-416987
2. Wolfspeed press release, Exhibit 99.1, "Wolfspeed Announces Conditional 30-Year, $1.5 Billion Loan Commitment from U.S. Department of War to Advance Domestic Wide Bandgap Supply Chain," Oct. 7, 2026

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