Dive Brief:
- Semiconductor manufacturer Wolfspeed has signed a $1.5 billion unconditional loan agreement with the Defense Department’s Office of Strategic Capital, the North Carolina-based company announced Wednesday.
- Wolfspeed plans to use the funds to upgrade its gallium nitride epitaxy capabilities for new communications infrastructure and electronic warfare systems, according to the press release.
- The money will also enable the wafer maker to develop ionizing radiation-resistant capabilities for its silicon carbide and future gallium nitride products. Additionally, Wolfspeed will be able to establish, expand and/or onshore low-voltage and high-voltage power device production capabilities.
Dive Insight:
The proposed loan will build on Wolfspeed’s silicon-carbide technology, intellectual property and manufacturing footprint at its facilities in North Carolina, New York and Arkansas, according to the release.
The plans include additional volume at Wolfspeed’s Mohawk Valley Fab in Marcy, New York, and its Research Triangle Park location in Durham, North Carolina, Brad Kohn, Wolfspeed’s EVP chief legal and global affairs officer, said in an emailed statement.
“The conditional loan commitment letter reflects Wolfspeed’s strong position in the silicon carbide and wide bandgap semiconductor markets, and reflects the strategic importance of secure, domestic silicon carbide and gallium nitride supply chains,” Kohn said.
The pending loan and private investment would help enhance the U.S. supply chain for wide bandgap materials and power devices, DOD said in its press release. It would help improve the agency’s domestic access to wide bandgap materials and devices used in high-performance propulsion systems, energy weapons, drones, electronic warfare systems, radars and missile defense systems.
“GaN has an even wider bandgap than [gallium arsenide semiconductor materials], which means it can operate at voltages that would ruin devices made out of GaAs, enabling the design of microsystems that can operate at higher powers,” according to the Defense Advanced Research Projects Agency, DOD’s research and development branch.
Wide-bandgap semiconductor materials “appeared promising” because of their ability to rapidly move electrons as well as handle large electric fields, driving the materials’ ability to provide more radiofrequency power, DARPA said in its research layout.
The products are critical to military and commercial applications such as the Army Navy/Transportable Radar Surveillance system, DARPA said. The AN/TPY-2 radar system is “a missile defense radar that can detect, track and discriminate ballistic missiles, according to RTX subsidiary Raytheon.
The proposed loan will consist of up to four payment installments, with the initial payment amounting to $600 million, according to Wolfspeed’s securities filing. The remaining payments will range from $200 million to $400 million.
The loan is expected to have a 30-year maturity as well as a 36-month commitment period, during which Wolfspeed can tap into the various payment installments.
DOD’s Office of Strategic Capital announced another conditional loan Thursday morning. The agency committed $150 million to PsyQuantum to boost the company’s domestic advanced manufacturing and prototyping capabilities.
The loan is part of DOD’s $350 million quantum computing initiative that was also announced Thursday. The program will be managed through the Office of the Undersecretary of Defense for Research and Engineering and expects quantum-enabled applications such as chemistry and materials science to help develop and manufacture “more lethal” weapons, platforms and other capabilities at lower costs.
The program aligns with the White House Office of Science and Technology’s Golden Age of Science report, which aims to ramp up R&D for new technologies and rebuild the domestic industrial base.
