Wolfspeed confirms Chapter 11 bankruptcy protection
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Silicon carbide chip maker Wolfspeed has filed for Chapter 11 bankruptcy protection in a Texas court as part of its restructuring.
The pre-packaged deal negotiated by Wolfspeed will see a reduction of $4.6bn in its debt and a reduction of 60% in its interest repayments, with shareholders receiving between 3% and 5% of their holding in the restructure.
The Restructuring Support Agreement, expected to close by the third quarter of 2025, will also see Renesas Electronics own 38% of the company. The RSA also covers more than 97% of holder of its major debt.
The company is at pains to point out that it is still a going concern with $1.3bn in cash and is still able to pay suppliers during the restructuring. The silicon carbide chips are used for the powertrain in electric vehicles and in renewable energy inverters for wind and solar farms to boost power conversion efficiency. Having a sovereign supply of such chips in the US has been a key driver for the company with support from the US CHIPS and Science Act for its 200mm automated fab in Mohawk Valley, New York (above).
“We are continuing to move forward with our accelerated restructuring process to strengthen our capital structure and fuel our next phase of growth,” said Robert Feurle, newly appointed Chief Executive Officer at Wolfspeed.
“With a stronger financial foundation, Wolfspeed will be better positioned to move faster on our strategic priorities and maintain our position as a global leader in the silicon carbide market. The strong support of our lenders is a testament to their belief in our business and our ability to capitalize on the opportunities ahead, driven by our purpose-built, fully automated 200mm manufacturing footprint,” he added.
“Looking ahead, we remain laser-focused on delivering cutting-edge products to our customers and working with our vendors in the normal course. I’d also like to thank our employees for their hard work and continued commitment to driving the business forward. I am confident that taking this action will better position Wolfspeed to meet the growing demands of the semiconductor market.”
Wolfspeed has filed a number of motions with the court in Houston covering employee compensation and benefits programmes and payment to vendors. The company says it expects to receive court approval for these requests shortly. The deal also comes with the closure of the company’s older 150mm fab in North Carolina to focus on the 200mm plant.
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