Department of War Offers Wolfspeed $1.5B Conditional Chip Loan
The Office of Strategic Capital offers Wolfspeed a 30-year loan for silicon carbide and GaN chips used in radars and drones, pending due diligence.
WASHINGTON — The Department of War’s Office of Strategic Capital (OSC) announced a $1.5 billion conditional loan commitment to Wolfspeed, Inc. on October 7, aiming to expand U.S. production of semiconductor materials the department considers critical to modern weapons. The release, issued at 4:00 PM ET, describes Wolfspeed as a vertically integrated U.S. manufacturer of silicon carbide (SiC) wafers, SiC power devices and gallium nitride (GaN)-on-SiC wafers.
What the department announced
According to the war.gov release, the loan, combined with private capital, would strengthen the U.S. supply chain for these “wide bandgap” materials and devices. The department said they are used in high-performance propulsion systems, directed energy weapons, drones, electronic warfare systems, radars and missile defense systems.
“The Office of Strategic Capital is advancing President Trump’s priority of supporting the domestic semiconductor supply chain to achieve American dominance in the era of Super Intelligence,” said Emil Michael, Under Secretary of War for Research and Engineering.
OSC Director David A. Lorch said the investment advances U.S. military and economic security by helping “build a secure, reliable domestic supply chain for SiC and GaN that benefits the Department of War, the U.S. defense industrial base, and the broader U.S. economy.”
Not yet a done deal
The commitment is conditional. The department said Wolfspeed must satisfy “various financial, legal, technical, investment, and due diligence requirements” before financial close. Wolfspeed’s own release added: “There can be no assurance that definitive agreements will be executed or that any financing will be provided.”
In a filing with the Securities and Exchange Commission the same day, Wolfspeed said the facility is expected to carry a 30-year maturity and be funded in up to four tranches. The first, $600 million, would refinance the company’s first-lien senior secured notes due 2030. Later tranches would pay for the build-out of domestic SiC and GaN production.
The filing sets further conditions. Wolfspeed would have to contribute at least $750 million of its own from qualifying sources, such as new equity, unless OSC sets a different amount during due diligence. The government would also receive warrants for up to 7.5% of Wolfspeed’s fully diluted equity, issued as each tranche is funded.
What Wolfspeed says it will build
Wolfspeed said it plans to use the money to upgrade its GaN epitaxy capabilities for next-generation communications and electronic warfare systems, and to develop radiation-hardening capabilities for its current SiC and future GaN products. The Durham, North Carolina-based company cited its manufacturing footprint in North Carolina, New York and Arkansas.
“SiC and GaN have critical national security applications,” said Chief Executive Robert Feurle. “With this financing, the company would be well positioned to not only continue to serve the DoW but also expand its capabilities for the benefit of U.S. national security as a whole.”
What it means
Analysis: The structure goes beyond a simple loan. The first draw would retire existing company debt, and the warrants would give the government a potential equity stake in the company. Whether any money moves still depends on steps outside Wolfspeed’s control: the filing lists congressional authorization, available appropriations and Office of Management and Budget concurrence among the conditions.
Sources
- U.S. Department of War: Office of Strategic Capital Announces $1.5 Billion Conditional Loan Commitment to Wolfspeed
- Wolfspeed: Conditional 30-Year, $1.5 Billion Loan Commitment from U.S. Department of War
- SEC: Wolfspeed Form 8-K, October 7, 2026
Additional sources
- Office of Strategic Capital: program overview: OSC’s founding in December 2022 and the 31 technology categories Congress authorized it to finance in the 2024 defense authorization act
- Wolfspeed: company newsroom release: the four program goals, including onshoring of GaN power-device production
