Wolfspeed (WOLF.US), a silicon carbide chip manufacturer, receives a loan of up to 1.5 billions USD from the U.S. Department of Defense and surges after hours.
The US Department of Defense has committed to providing Wolfspeed, a silicon carbide chip manufacturer, with a conditional loan of up to $1.5 billions to support the company's development of materials it describes as critical to national security.
According to Golden Ten Data APP, the US Department of Defense has pledged to provide a conditional loan of up to $1.5 billion to silicon carbide chip manufacturer Wolfspeed (WOLF.US), to support the company's development of materials it claims are critical to national security. Boosted by this news, as of press time, Wolfspeed's shares surged nearly 19% in after-hours US trading on Wednesday.
According to a statement released by Wolfspeed, the US government has issued the company a conditional letter of commitment, agreeing to provide up to $1.5 billion in senior secured financing with a 30-year term. Under the terms of the transaction currently under negotiation, in exchange, Wolfspeed will issue warrants to the US Department of Defense, allowing it to purchase shares in batches equivalent to up to 7.5% of Wolfspeed's equity.
Headquartered in North Carolina, Wolfspeed filed for bankruptcy in July 2025, after persistent problems at a key plant producing silicon carbide wafers. As part of the Biden administration's chip initiative, Wolfspeed had previously received $750 million in funding, but US President Trump had fiercely criticized the project since taking office. The Trump administration has been readjusting several funding grants, and prior to the bankruptcy filing, Wolfspeed had only received a portion of the allocated funds.
On Wednesday, Wolfspeed stated that the company will use government financing to produce silicon carbide materials and wide bandgap power devices, which are used in power electronics for the telecommunications, aerospace, and defense industries. The company also plans to use this funding to upgrade its capabilities to supply a material used in warfare communications systems.
The Trump administration has shown willingness to directly invest in companies it deems critical to US national security and to provide loans to such businesses. Last year, the US government took an equity stake in chip manufacturer Intel (INTC.US). This May, the US Department of Commerce announced it would provide over $2 billion in funding in exchange for non-controlling stakes in a group of quantum computing companies.
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