A 100mm x 100mm silicon carbide interposer made from a Wolfspeed 300mm wafer, in a company demonstration Credit: Wolfspeed The US Department of War has offered chipmaker Wolfspeed a conditional loan of up to $1.5bn over 30 years. In return, Wolfspeed would give the department warrants to buy up to 7.5% of the company. Wolfspeed filed for bankruptcy protection in June 2025. The department’s Office of Strategic Capital announced the commitment on Wednesday.
In its own announcement, Wolfspeed said the money would support US production of silicon carbide materials and power devices, with a focus on national security. “SiC and GaN have critical national security applications,” said Robert Feurle, Wolfspeed’s chief executive. Wolfspeed shares rose 25% to $39.22 in after-hours trading on Wednesday, Bloomberg reported. What the money is for Silicon carbide (SiC) and gallium nitride (GaN) are chip materials used for high power and radio frequency work. Wolfspeed sells them for defence, aerospace, AI and critical infrastructure, according to the company.
It has plants in North Carolina, New York and Arkansas. Wolfspeed plans to upgrade its GaN technology for communications networks and electronic warfare systems. It also plans to make radiation-hardened versions of its SiC and future GaN products. The department said the materials go into propulsion systems, directed energy weapons, drones, electronic warfare systems, radars and missile defence systems. “Securing U.S. military and economic superiority requires bold domestic investments in critical dual-use capabilities,” said Peter B.
Zuckerman, senior managing director at the Office of Strategic Capital. The release also quoted under secretary Emil Michael, who oversees research and engineering. “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,” Michael said. The terms The Wolfspeed loan would be paid out in up to four tranches, according to Wolfspeed’s filing with the SEC. The first, of $600m, would repay in full the company’s senior secured notes due in 2030.
The others, of $200m to $400m each, would fund the project. Interest would track the US Treasury rate for a similar maturity, plus a margin provisionally set between 1.25% and 1.75%. For the first five years, Wolfspeed could add the interest to the loan instead of paying it in cash. The warrants would be issued as each tranche is paid out.
The department could also name a non-voting observer to the board. Wolfspeed would have to keep its headquarters in the US, and most of its directors would have to be US citizens. Several conditions apply before any money moves. Wolfspeed must try to turn most of its convertible notes into shares.
It must raise $750m from other sources. Congress must authorise and fund the loan. Wolfspeed said there is no assurance that the financing will be provided. From bankruptcy to a Pentagon loan Wolfspeed filed for Chapter 11 on 30 June 2025 and emerged on 29 September 2025, according to its quarterly report.
Bloomberg reported that it had struggled with production problems at a key wafer factory. It had won a $750m award under a Biden-era chips programme but collected only part of it. The Trump administration took a stake in Intel last year. In May, the US agreed to back nine quantum companies with $2bn in exchange for equity stakes.
Last week, Trump told TIME the US might take stakes in OpenAI and Anthropic. The Pentagon also set up an Autonomous Warfare Command last week to scale drones and AI.
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