Department of Defense commits US$75M to Halo SiC wafer expansion

This $75M conditional loan is a structural repositioning of the SiC substrate supply chain, not a procurement line item. Technically, Halo targets the 150mm-to-200mm substrate transition—the single largest cost bottleneck in the power-semiconductor stack. If their crystal-growth methodology outperforms the PVT route dominant at Wolfspeed and ST, the $/cm² for 200mm SiC could compress 30–40% within 18 months, squeezing legacy 150mm players. Downstream, 800V AI data-center power architectures and automotive SiC MOSFETs absorb the first wave of capacity. The conditional structure is the real story. Milestone gates, domestic-content ratios, and a mandatory private-capital match mean Halo operates under dual accountability: commercial ROI and security KPIs simultaneously. The government de-risks the first tranche but does not underwrite full capex. Wolfspeed's Chapter 11 has left a US capacity vacuum. ST and Infineon are pushing 200mm lines but on slower timelines. Chinese substrate makers face a bifurcated market: excluded from US government-linked procurement, yet free to dominate civilian EV and industrial segments. A 150mm price war is likely by Q3 2026. The 12–24-month tail: the AI power-conversion supercycle absorbs new supply before oversupply hits. More critically, the OSC conditional-loan instrument becomes the policy template for GaN substrates, diamond heat spreaders, and the broader critical-semiconductor-materials category.