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WolfSpeed, a semiconductor supplier of Durham, 38, North Carolina, filed for Chapter 11 bankruptcy and said that officially restructuring could reduce billions of dollars in debt.
The filing to the Southern Texas district comes eight days after WolfSpeed announces a restructuring agreement that grants its creditor ownership once it emerges from bankruptcy.
“We continue to carry on an accelerated restructuring process to strengthen our capital structure and strengthen our next stage of growth,” said Robert Feurle, CEO of Wolfspeed.
The company is carrying out a packaged bankruptcy. That is, the plan has plenty of support from creditors. On Monday, Wolfspeed said its bankruptcy was supported by 97% of senior secured obligations and 67% of convertible obligations, as well as holders of Japanese semiconductor company Renesas.
WolfSpeed expects to close bankruptcy by the end of September after a massive cut of 70% of its debt, or about $4.6 billion. At the time, new shareholders appointed a new board of directors.
The published chipmaker is one of the Triangle’s biggest employers, and last summer joined with 5,000 employees worldwide. Most of them were based in North Carolina. However, the company has since cut its staff by more than 25% as it seeks aggressive cost reductions.
Originally named Cree, Wolfspeed funded the transition from the legacy LED and lighting sector and undertook over $6 billion in debt to produce a unique type of semiconductor called silicon carbide. In 2022, WolfSpeed announced that it would open a major manufacturing plant in New York and a $5 billion material plant in West Chatham County, near Schiller city.
However, there are flags for manufacturing delays, demand for electric vehicles, and the growing competition is hampering Wolf Speed’s chip forecast. Last year, the company announced plans to close its device factory in Durham, shelved a multi-billion dollar facility project in Germany. In November, WolfSpeed fired CEO Greg Lowe seven years later.
Last October, WolfSpeed was awarded the Federal Chips Act Award, subject to a company that first restructures its 2026 debt. The Biden administration has not paid this $750 million award, and the Trump administration is not moving forward with a federal program designed to bolster semiconductor manufacturing in the country.
What happens when you’re bankrupted Wolf Speed?
The initial conversion obligation payments scheduled for May 2026 increased the chances of bankruptcy. This is a substantial amount of Chapter 11 weight, despite finishing with $1.3 billion in cash in March. This spring, WolfSpeed restructured its 2026 debt and rejected an offer to avoid bankruptcy, opting instead for what it called a “comprehensive” solution.
“Bankruptcy is a very powerful tool for businesses, but it’s also very flexible,” UNC law professor Kara Bruce said in an interview earlier this month. “So the company can plan to solve financial pain and understand how to coordinate its business for the future.”
The Southern District of Texas filed by WolfSpeed was the third most used bankruptcy court last year, according to Congressional Research Services.
WolfSpeed has introduced new websites to address bankruptcy, including a question and answer section for customers, vendors and investors. The company has provided materials as usual, saying Monday’s announcement will not affect employee pay or benefits.
Regarding what will happen with the stocks currently owned by investors, WolfSpeed said, “We cannot comment on this at this time, but we are committed to providing updates because we have news to share.”
Last week, WolfSpeed said it hopes to remain listed on the New York Stock Exchange during its bankruptcy, but the company admitted it could be delisted by a well-known exchange. That stock closed at 40 cents per share on Monday. On Tuesday morning, stocks exceeded 80 cents per share.
2025 News & Observers. Tribune Content Agency distributed to LLC.
Quote: Wolf Speed File for Bankruptcy Retrieved from July 3, 2025 in an effort to turn around NC chip maker (2025, July 2)
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