Wolfspeed receives $1.5B US conditional loan for defense chips

The United States government has offered the semiconductor manufacturer Wolfspeed up to $1.5 billion in conditional financing to bolster domestic production of advanced chips. The proposed 30-year loan, announced through the Office of Strategic Capital, aims to support the development and manufacturing of silicon carbide (SiC) and gallium nitride (GaN) technologies.

These wide-bandgap materials are critical for high-performance power systems and radio-frequency electronics used in drones, radar, electronic warfare, and missile defense systems. Wolfspeed, based in North Carolina, intends to use the funds to upgrade its GaN manufacturing capabilities and develop radiation-resistant versions of its SiC products for aerospace and satellite applications.

The move is framed as a matter of national security to ensure reliable access to essential semiconductor materials. However, the financing follows Wolfspeed’s insolvency filing approximately one year ago, raising questions regarding the use of state instruments to mitigate risks that private investors may be unwilling to absorb.