There have been growing doubts around the company since May, as a combination of growing economic uncertainty, in part due to the imposition of tariffs, and weakening demand have impacted its financial performance. Wolfspeed is currently saddled with over $6bn in debts.
Renesas Electronics, which has a supply agreement with Wolfspeed, has signed a Restructuring Support Agreement (RSA) with the company and has agreed to convert a $2bn deposit it had paid under a SiC wafer supply agreement into Wolfspeed’s convertible notes, common shares, and warrants.
Wolfspeed is now expected to file for voluntary Chapter 11 petitions under the US Bankruptcy Code. The company said that its decision to file for Chapter 11 had the backing of key investors.
According to Wolfspeed it expects to complete the process swiftly and emerge from Chapter 11 by the end of Q3 calendar year 2025. The RSA is expected to reduce total debt by about 70% (approximately $4.6 billion) and cut annual cash interest payments by around 60%.
The firm has recently undergone a series of leadership changes, appointing industry veteran Robert Feurle as its CEO in March and David Emerson as COO in May after announcing in May that it would be cutting its senior leadership team by 30%.
While Wolfspeed restructures, TrendForce is predicting that its SiC device market share will decline over the long term amid uncertainty surrounding its bankruptcy proceedings.
So, who will benefit? Well, China’s leading role in SiC adoption in EVs is likely to play a key part as will geopolitical factors. Consequently, key beneficiaries are expected to include non-US companies such as STMicroelectronics, Infineon, Rohm, and Bosch.
STMicro is said to be particularly well-positioned, supported by its aggressive localisation strategy in China.
