Wolfspeed said Oct. 7 that it has a conditional commitment from the Pentagon's Office of Strategic Capital for a senior secured loan of up to $1.5 billion with an expected 30-year maturity. In return, the silicon carbide chipmaker would issue the government warrants for up to 7.5% of its fully diluted equity, according to its press release and an SEC filing. Wolfspeed's filing names the agency as the U.S. Department of War.

The 8-K describes up to four tranches. The first $600 million would refinance Wolfspeed's first-lien notes due 2030 in full. The remaining $900 million, in draws of $200 million to $400 million, would fund silicon carbide wafer and device production, domestic gallium nitride production, GaN-on-SiC radio-frequency wafers and radiation hardening. The filing says the rate is expected to be the comparable Treasury rate plus a risk premium provisionally set at 1.25% to 1.75%, and interest can be capitalized for the first five years.

The warrants would come in two pieces, 5% and 2.5% of the company, each priced off a volume-weighted average share price and issued as each tranche funds, per the filing. Wolfspeed must also raise at least $750 million from qualifying sources such as new equity, try to convert most of its convertible notes to equity and accept an OSC non-voting board observer. The company warns there is no assurance a final deal or any funding will follow. MarketWatch reported the shares jumped 25% after hours.

The structure follows a run of federal deals that trade support for a stake. CNBC reported the Commerce Department took a 10% stake in Intel in August 2025, the Pentagon bought $400 million of MP Materials preferred stock with warrants that MP said could reach 15%, and the government became a 10% holder of Trilogy Metals with warrants for 7.5% more. The Energy Department's loan office took warrants for 5% of Lithium Americas and 5% of its joint venture with General Motors.

Semafor reported last month that the Pentagon has negotiated equity or equivalents such as warrants in at least 10 companies, at least seven involving OSC, an office that was created to make loans. A spokesperson for Senate Armed Services Committee Chair Roger Wicker told Semafor that the committee wants Congress to give OSC explicit legal authority for its equity stakes.

*Sources: Wolfspeed press release and Form 8-K (Oct. 7, 2026); MarketWatch; CNBC; U.S. Department of Energy; Semafor.*