Wolfspeed said the Defense Department Office of Strategic Capital offered a conditional loan of up to 1.5 billion dollars for silicon carbide production. Shares rose 27 percent in extended trading. The loan is not closed.
Chipmaker Wolfspeed said on Wednesday it had received a conditional loan commitment of up to 1.5 billion dollars from the US Department of Defense to expand domestic production of silicon carbide materials and power devices. Reuters said the shares surged 27 percent in extended trading.
The company makes silicon carbide chips used where large amounts of power must be converted including electric vehicles solar inverters and industrial systems. It said the conditional 30-year commitment through the Office of Strategic Capital is meant to improve its capital structure.
Wolfspeed said it plans to use the financing to upgrade gallium nitride technology for communications and electronic-warfare systems and to develop radiation-hardening capabilities. Under the proposed terms it would issue warrants letting the department buy up to 7.5 percent of fully diluted equity.
The funding is subject to due diligence definitive agreements government approvals and other conditions. The item is a conditional commitment not a funded loan. No closing date was given.