Private equity firm, Apollo Global Management, is leading a group of lenders that are investing up to $2 billion in chip-maker, Wolfspeed Inc., for its US expansion plan. The deal would make available $1.25 billion for the company immediately, with an addition $750 million available later. The financing can be repaid after three years and is structured as seven-year secured notes with a coupon of 9.875%. The deal could reportedly be announced in the coming days.
Wolfspeed focuses on manufacturing silicon-carbide chips that are used in electric vehicles, chargers, and other products that seek less power usage in their semiconductors. Last September, the company announced plans to build a silicon carbide manufacturing facility in Chatham County, North Carolina, near its headquarters in Durham. Sunday reports that it also has plans to expand two production facilities that supply silicon-carbide wafers to automakers.
While neither Apollo nor Wolfspeed have yet confirmed the news, the deal marks a significant step forward for the company’s ambitions in the US.