Wolfspeed just landed a $1.5 billion conditional loan commitment from the Department of War, and the deal includes warrants that would let the federal government buy up to 7.5% of the North Carolina semiconductor maker's stock. The announcement, made Wednesday, sent Wolfspeed shares soaring; the company is also building a massive wafer plant near Siler City.
Under the terms announced Wednesday, the loan is structured as a 30-year senior secured delayed-draw facility that requires Wolfspeed to issue stock warrants giving the federal government the right to purchase up to 7.5% of its stock in tranches, according to The Wall Street Journal. U.S. Senator Ted Budd celebrated the news in a post on X
, writing that he was glad to see the Department of War recognize the importance of silicon carbide technologies and the potential of Wolfspeed's manufacturing, adding that the investment would boost national security capabilities and support good-paying jobs in North Carolina.
The loan is intended to support domestic production of silicon carbide materials and wide-bandgap power devices. Separately, Wolfspeed plans gallium nitride upgrades and radiation-hardened products, per The Next Web. Wide-bandgap chips like the silicon carbide and gallium nitride varieties Wolfspeed produces can handle far more electrical stress than traditional silicon, a property valuable for next-generation military hardware.
Markets Cheer the Pentagon's Vote of Confidence
Investors reacted fast. Wolfspeed stock jumped more than 25% in after-hours trading to $39.22 and was up 14% in morning trading, pushing the stock up over 100% for the year, according to 24/7 Wall St. That rebound follows a brutal stretch for the company, whose market value had been battered by years of financial strain.
The loan is administered through the Department of War's Office of Strategic Capital, per the U.S. Department of Defense. The warrants would give the federal government the right to buy up to 7.5% of Wolfspeed's stock. Wide-bandgap semiconductors have national-security applications.
A Company That Nearly Didn't Make It
The federal loan commitment comes less than two years after Wolfspeed sought Chapter 11 bankruptcy protection in mid-2025, Quartz reports. The company had also struggled with production problems at a key wafer factory.
That turmoil followed a leadership shakeup. In March 2025, Wolfspeed named semiconductor industry veteran Robert Feurle as chief executive effective that May, replacing former CEO Gregg Lowe, who was dismissed in late 2024 amid mounting financial losses, according to Business North Carolina.
Siler City Megasite at the Center of It All
Wolfspeed's primary North Carolina expansion is the 2-million-square-foot John Palmour Manufacturing Center for Silicon Carbide in Chatham County near Siler City. The $5 billion Chatham County factory is planned as the world's first high-volume 200mm silicon carbide wafer facility, according to the National Institute of Standards and Technology.
Wolfspeed reached a non-binding preliminary terms agreement with the Department of Commerce for up to $750 million in proposed CHIPS Act funding. A separate $750 million financing group was led by Apollo Global Management.
Wolfspeed has more than 35 years of company history. To build out a local workforce for the Siler City site, Wolfspeed partnered with North Carolina Agricultural and Technical State University on a $4 million endowed scholars program, with a goal of 1,800 site jobs, according to N.C. A&T State University.
Whether Wolfspeed can meet all the closing conditions needed to finalize the loan documents remains an open question, as does how quickly the Siler City megasite can reach full operational capacity following the company's recent leadership changes.
