Wolfspeed Files for Bankruptcy
Wolfspeed, one of the most prominent U.S. silicon carbide (SiC) semiconductor manufacturers, is seeking Chapter 11 bankruptcy protection in a calculated effort to shed its growing debt burden. The North Carolina-based firm embarked on court-ordered restructuring on June 30, 2025, after agreeing to a pre-packaged deal with significant creditors. The restructuring plan seeks to wipe out some $4.6 billion of unsecured debt, or about 70% of its total liabilities, and lower annual interest costs by 60%.
Restructuring deal involves Apollo Global Management, the U.S. subsidiary of Renesas Electronics, and bondholders who have committed to converting close to $5 billion in debt into stock. Wolfspeed has also obtained $275 million in new capital to fund operations throughout the restructuring. The firm retained approximately $1.3 billion in cash prior to the filing and anticipates coming out of bankruptcy by the conclusion of Q3 2025.
Operations will go on throughout the bankruptcy process, with Wolfspeed assuring the continuation of its commitment to providing SiC chips for electric vehicles, industrial systems, and renewable energy technologies. Existing shareholders will, however, experience heavy dilution, with only 3–5% of the reorganized equity allocated to them, while creditors will take over the new company.
Even after the filing, shares of Wolfspeed surged more than 60% in after-market trading, a sign of investors’ hopes that the company’s lighter debt burden will propel it forward. Previously a leader in the SiC market, Wolfspeed hopes to come out of bankruptcy leaner and more concentrated, with still some difficulty ahead from escalating competition and unpredictable demand for semiconductors.
