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Chipmaker Wolfspeed to file for bankruptcy

Chipmaker Wolfspeed to file for bankruptcy

Yahoo25-06-2025
This story was originally published on Manufacturing Dive. To receive daily news and insights, subscribe to our free daily Manufacturing Dive newsletter.
Semiconductor manufacturer Wolfspeed has entered a restructuring agreement with its top creditors to cut $4.6 billion in debt through Chapter 11 bankruptcy.
The Durham, North Carolina-based company struck a deal with creditors to reduce its total debt by approximately 70% and annual total cash interest payments by 60%, according to a news release.
To move forward with the financial restructuring, Wolfspeed said it will soon file for Chapter 11 bankruptcy and complete the process by the end of September. The silicon carbide supplier plans to remain operational during the restructuring.
Wolfspeed has worked to cut costs and rightsize its semiconductor business over the past year after running into financial difficulties. Last November, the company said it would lay off 20% of its workforce and close multiple sites in an effort to save about $200 million. A few weeks earlier, Wolfspeed was approved to receive $750 million in funding through the CHIPS and Science Act to help expand facilities in North Carolina and New York.
In March, Wolfspeed's shares plunged to a 27-year low as concerns rose over the company's ability to secure its CHIPS Act funding under the Trump administration, Reuters reported. Tom Werner, chairman of the company's board of directors, said on a May earnings call that Wolfspeed is having a 'constructive dialogue' with the CHIPS program office to secure federal funding.
As part of its effort to cut costs, Werner also said on the call that Wolfspeed is in the final stages of cutting its 150 millimeter chip operations to simplify and exclusively handle the 200 millimeter chip market. The company is also reducing its leadership team by 30%, he said. Now, the company is moving forward with plans to file for bankruptcy.
'After evaluating potential options to strengthen our balance sheet and right-size our capital structure, we have decided to take this strategic step because we believe it will put Wolfspeed in the best position possible for the future,' Robert Feurle, Wolfspeed's CEO, said in a June 22 statement.
Wolfspeed is seeking approval to reorganize through a bankruptcy filing. It plans to continue to pay vendors and operate business as usual during the restructuring process, according to a release. It also expects to be fully funded through cash flow generation post-restructuring.
Japan-based Renesas Electronics, one of Wolfspeed's key customers, notified shareholders to expect a loss of approximately 250 billion yen ($1.7 billion) for the first half of the year in response to the situation.
In 2023, Renesas signed a 10-year supply deal with Wolfspeed worth $2 billion. The deal was later increased to $2.06 billion in October 2024. As part of the restructuring agreement, the company agreed to convert that deposit into Wolfspeed convertible notes, common stock and warrants. Contingencies are in place if the bankruptcy is not approved.
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