Wolfspeed (NYSE: WOLF) received a conditional loan commitment of up to $1.5 billion from the U.S. Department of Defense’s Office of Strategic Capital. The 30-year financing is intended to expand domestic manufacturing of silicon carbide (SiC) and other wide-bandgap semiconductors used in national security and defense applications.
The funding would also support upgrades to Wolfspeed’s gallium nitride (GaN) capabilities for communications and electronic warfare systems. In exchange, Wolfspeed would issue the government warrants for up to 7.5% of its equity.
Wolfspeed shares surged after the announcement, while shares of competitors such as ON Semiconductor slipped.