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Wolfspeed Stock Soars on Financing Deal with Pentagon -- Barrons.com

Wolfspeed Stock Soars on Financing Deal with Pentagon -- Barrons.com

By Al Root Shares of silicon carbide semiconductor maker Wolfspeed soared late Wednesday after announcing a financing deal with the Pentagon. Wolfspeed stock was up almost 24% at $38.80. Through Wednesday trading, shares were up 18% over the past 12 months, although shares were down more than 50% from a May 52-week high of more than $80. The company has received a conditional loan commitment from the Defense Department for $1.5 billion in long-term 30-year financing, contingent on producing silicon carbide materials and other power devices in America. The Defense Department will get warrants equivalent to 7.5% of Wolfspeed stock if and when the deal is executed. Most chips are made on silicon. Silicon carbide substrates are good for high-voltage applications such as data centers and electric vehicles. They also find their way into satellite technologies. The Defense Department has been investing heavily to boost domestic production of key materials. In July 2025, it provided MP Materials with capital, a price floor, and a guaranteed customer for MP's rare earth materials in a landmark deal. "Silicon carbide and gallium nitride have critical national security applications," said Wolfspeed CEO Robert Feurle in a news release. "With this financing, the company would be well positioned to not only continue to serve the [Department of War] but also expand its capabilities for the benefit of U.S. national security as a whole." The Trump administration has revived the use of Department of War as a secondary name for the DOD. Gallium nitride is another Wolfspeed product used in high-end electronics, including radars. The financing commitment is helpful. Wolfspeed isn't profitable yet, and it is spending heavily on facilities in North Carolina and New York. Capital spending is ramping down in 2026 as construction wraps up. Wolfspeed remains a relatively small company, with a market value of about $2 billion. Only three analysts cover the stock. All three rate shares Hold. Write to Al Root at allen.root@barrons.com. This c

Dow Jones•2026-10-07 21:53
Wolfspeed receives a conditional loan commitment of 1.5 billions dollars from the U.S. Department of Defense

Wolfspeed receives a conditional loan commitment of 1.5 billions dollars from the U.S. Department of Defense

Reuters, October 7 — Chip manufacturer Wolfspeed (WOLF.N) announced on Wednesday that it has received a conditional loan commitment of up to 1.5 billions USD from the U.S. Department of Defense (DoD) to expand domestic production of silicon carbide materials and power devices. Boosted by this news, its stock price surged by 27% in after-hours trading. Wolfspeed uses silicon carbide to produce chips, which are more energy efficient and widely utilized in electric vehicles, solar inverters, and industrial power systems that require large amounts of power conversion. The company stated that this 30-year conditional loan commitment, provided through the DoD’s Office of Strategic Capital, demonstrates efforts to optimize its capital structure and solidify its financial foundation. Wolfspeed plans to use the funds to upgrade its gallium nitride technology to meet the demands of next-generation communication infrastructure and electronic warfare systems, as well as to develop radiation-resistant capabilities. The financing is subject to due diligence, the signing of definitive agreements, government approvals, and other conditions. According to proposed terms, Wolfspeed will be required to issue warrants to the DoD, allowing it to purchase up to 7.5% of Wolfspeed’s fully diluted equity. (For convenience of non-English readers, Reuters provides automated translations of its reports in multiple languages. Since automated translations may be inaccurate or lack necessary context, Reuters does not guarantee the accuracy of these translations and provides them for reader convenience only. Reuters bears no responsibility for any damage or loss resulting from the use of such features.)

路透社•2026-10-07 21:11

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