[News] Wolfspeed Reportedly to Be Taken Over by Apollo-Led Creditors Amid Bankruptcy, with Rivals Set to Gain

Nearly a month after rumors surfaced about an imminent bankruptcy, a clearer picture has emerged: Wolfspeed is now on the verge of a major shake-up. Creditors led by Apollo Global Management are preparing to take control under a bankruptcy plan, according to Reutersciting Bloomberg.

The reports note that the struggling silicon carbide giant is expected to unveil a prepackaged bankruptcy deal in the coming days—designed to swiftly slash billions in debt. After locking in a restructuring agreement, Wolfspeed will call on creditors to vote on the plan before formally filing for Chapter 11 protection, the reports add.

Rivals Led by STMicroelectronics to Benefit

As observed by TrendForce, Wolfspeed’s SiC device market share is projected to decline in long run amid uncertainty surrounding its bankruptcy proceedings, as customers may shift to competing suppliers during the restructuring period.

With China dominating SiC adoption in EVs and geopolitical factors at play, key beneficiaries will likely be non-US suppliers including ST Micro, Infineon, Rohm, and Bosch, according to TrendForce.

ST Micro is well-positioned to benefit most given its aggressive localization strategy in China, including its joint venture with Sanan in China, as per TrendForce.

Proposed Plan in Detail

Notably, under the proposed bankruptcy plan, Wolfspeed shareholders could recover up to 5%, Bloomberg reported—a rare outcome, as equity holders are typically wiped out in Chapter 11 cases after creditors are paid.

The reports suggest that the company’s ties with Apollo date back to 2023, when it secured $1.25 billion in debt financing from the firm to support its U.S. expansion, with an option to raise that amount to $2 billion.

Wolfspeed has long been under pressure, squeezed by fierce competition from fast-growing Chinese rivals, sluggish demand in industrial and automotive markets, and uncertainty over U.S. trade policies. As of March, the company reported roughly $1.33 billion in unrestricted cash and short-term investments—dwarfed by a towering $6.5 billion in debt, according to a regulatory filing cited by the reports.

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(Photo credit: Wolfspeed)