Chipmaker Wolfspeed secures $1.25 bn in debt funding

Wolfspeed said a group led by Apollo Global Management would make a debt investment of $1.25 billion in the chipmaker, with room for an additional $750 million, to support its U.S. expansion.
Wolfspeed“The financing would help scale up near-term operations at our Mohawk Valley Fab and construction of our Siler City materials facility to help us capture the growing silicon carbide market opportunity,” said Wolfspeed CEO Gregg Lowe.

The company in September last year had announced a  $1.3 billion investment in a factory in Chatham County, North Carolina to make raw materials for chips that power electric vehicles, among other things.

The investment is targeted to generate a more than 10 fold increase from Wolfspeed’s current Silicon Carbide production capacity on its Durham campus, supporting the company’s long-term growth strategy.

The facility will primarily produce 200mm Silicon Carbide wafers, which are 1.7x larger than 150mm wafers, translating into more chips per wafer and ultimately, lower device costs. These wafers will be used to supply Wolfspeed’s Mohawk Valley Fab, which opened in 2022 as the world’s first, largest and only fully automated 200mm Silicon Carbide fabrication facility.

Wolfspeed today said the financing is a significant step toward achieving the company’s $6.5 billion global capacity expansion plan.

The 9.875 percent notes will mature in 2030. The company has the option to pay the debt early, Wolfspeed said.

For its fourth quarter of fiscal 2023, Wolfspeed targets revenue in a range of $212 million to $232 million. Wolfspeed targets net loss of $98 million to $108 million, or $0.79 to $0.87 per diluted share.