U.S. semiconductor manufacturer Wolfspeed has announced plans to file for Chapter 11 bankruptcy protection as part of a broader restructuring strategy aimed at cutting its debt by 70% and securing $275 million in new financing. The move comes amid ongoing economic pressures and a strategic pullback from its planned expansion in Germany.
The restructuring agreement, backed by existing creditors, is expected to reduce Wolfspeed’s debt by approximately $4.6 billion. As of March, the company reported $1.33 billion in cash and $6.5 billion in total debt obligations. Subject to court and regulatory approval, the company aims to emerge from bankruptcy by the end of the third quarter.
“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,” said Robert Feurle, Wolfspeed’s Chief Executive Officer. “Wolfspeed has tremendous core strengths and great potential.”
The restructuring follows a series of financial setbacks and increasing uncertainty tied to U.S. trade policy. In May, Wolfspeed warned of the challenging political climate and economic volatility, and earlier shelved plans for a major semiconductor manufacturing facility in Germany. That plant, initially announced in early 2023 in partnership with ZF Friedrichshafen, was intended to supply silicon carbide chips to automakers including Mercedes-Benz.
Despite the restructuring, Wolfspeed says it will continue regular operations, maintain product supply, and pay vendors in the ordinary course of business. The company has filed an “All-Trade Motion” to ensure payments for goods and services continue throughout the bankruptcy process.
Feurle emphasized the company’s leadership in silicon carbide technology and its 200mm automated manufacturing capabilities, stating that the restructuring will allow Wolfspeed to focus on growing markets driven by electrification and demand for high-efficiency power components.