Chipmaker Wolfspeed has received a conditional 30-year loan commitment for up to $1.5 billion from the US Department of Defense (stylized as the Department of War).

The money would be used to support the US-based development and production of silicon carbide (SiC) materials and wide-bandgap power devices, with an additional focus on US national security applications, Wolfspeed said in a statement.

The company will also use the funding to upgrade its gallium nitride (GaN) epitaxy capabilities for next-generation communications infrastructure and electronic warfare systems and develop radiation-hardening capabilities for its current SiC and future GaN products.

The loan agreement is subject to substantial due diligence and numerous conditions, the negotiation and finalization of agreements, significant closing conditions, governmental authorizations and approvals, appropriations, and required third-party consents, Wolfspeed said in a statement.

The chipmaker will also be required to issue to the DoD VWAP-based warrants to purchase, in the aggregate, up to 7.5 percent of Wolfspeed’s fully diluted equity, with the warrants issuable pro rata as and when financing tranches are funded, the company said.

Silicon carbide is a synthetically produced crystalline compound of silicon and carbon. The material provides several advantages over conventional silicon for power applications, including better thermal conductivity, higher switching speeds, and lower dissipation, making it particularly suitable for the manufacturing of high-voltage power devices.

GaN, meanwhile, is a wide-bandgap material and can handle higher amounts of power than silicon, meaning GaN-based chips can be more efficient and durable than their silicon counterparts.

“SiC and GaN have critical national security applications,” said Robert Feurle, CEO of Wolfspeed. “With this financing, the company would be well positioned to not only continue to serve the DoD but also expand its capabilities for the benefit of US national security as a whole.”

“We believe the scale and 30-year tenor of this conditional commitment reflects the long-term importance of the technology and manufacturing capabilities Wolfspeed has built in the United States. This financing would strengthen our continued advancement of silicon carbide materials and wide-bandgap power devices, reinforcing our efforts to build a more resilient US semiconductor and defense industrial base.”

Founded in North Carolina in 1987, Wolfspeed is the world’s leading manufacturer of wafers and devices made from silicon carbide. However, in recent years, the company has been grappling with reduced demand for its 150mm wafers and, in January 2025, put its site near Dallas, Texas, up for sale for an undisclosed price.

In June 2025, the company filed for Chapter 11 bankruptcy as part of a restructuring agreement with its creditors, successfully completing its financial restructuring in September of the same year.