Wolfspeed Files for Bankruptcy Amid Restructuring Deal with Creditors

Wolfspeed has announced plans to file for bankruptcy as part of a restructuring agreement with its top creditors, aiming to reduce its debt by approximately 70%, or $4.6 billion. The company, a key player in carbide wafers and semiconductor components, has signed deals with most senior and convertible noteholders, seeking creditor approval for the terms.

The market reaction was immediate, with shares plummeting 12% in premarket trading. Year-to-date losses now exceed 86%, exacerbated by a 59% drop on May 20 when bankruptcy rumors first surfaced. Wolfspeed's pivot to semiconductors for EV drivetrains and charging systems collided with tightening U.S. tariffs and softening EV demand, straining its financial position.

"This strategic step positions Wolfspeed for long-term stability," said CEO Robert Feurle. The restructuring underscores the challenges facing semiconductor firms navigating macroeconomic headwinds and sector-specific pressures.