According to MoneyDJWolfspeed is reportedly preparing to file for bankruptcy in the near future. Japanese semiconductor giant Renesas Electronics, which has a supply agreement with Wolfspeed, announces that it has signed a Restructuring Support Agreement (RSA) with the company. As noted in its press releaseRenesas expects to record a loss of approximately JPY 250 billion in the first half of fiscal 2025 (January to June). The company states this estimate is preliminary and may change depending on various factors, the report adds.
Following the RSA, Renesas agrees to convert the USD 2.062 billion deposit it had paid under the SiC wafer supply agreement into Wolfspeed’s convertible notes, common shares, and warrants.
Renesas initially signed the supply agreement in July 2023, providing a USD 2 billion deposit. The agreement was later amended in October 2024 to raise the deposit to USD 2.062 billion, as noted in its press release.
Meanwhile, Renesas has reportedly scrapped plans to produce SiC power semiconductors for EVs due to falling prices, driven by slowing demand and oversupply from Chinese manufacturers, according to MoneyDJciting Nikkei.
Wolfspeed’s Current Situation
On June 22, Wolfspeed announces a pre-packaged plan of reorganization through a Restructuring Support Agreement (RSA), which it says has strong backing from key lenders. According to its press releasethe company intends to seek approval for the plan and soon file voluntary Chapter 11 petitions under the U.S. Bankruptcy Code.
Wolfspeed expects to complete the process swiftly and emerge from Chapter 11 by the end of Q3 calendar year 2025. According to its press release, the RSA is expected to reduce total debt by about 70% (approximately USD 4.6 billion) and cut annual cash interest payments by around 60%.
The company also reports holding USD 1.3 billion in cash as of Q3 FY2025, providing sufficient near-term liquidity to support customers and pay vendors. Existing equity holders are expected to receive 3% to 5% of the reorganized company’s common equity, as its press release notes.
Last week, Bloomberg reported that Wolfspeed plans to file for a prepackaged bankruptcy, with control of the company expected to shift to creditors, including Apollo Global Management.
Rivals Led by STMicroelectronics to Benefit
According to TrendForce, Wolfspeed’s SiC device market share is projected to decline over the long term amid uncertainty surrounding its bankruptcy proceedings. With China leading SiC adoption in EVs and geopolitical factors in play, key beneficiaries are expected to include non-U.S. suppliers such as STMicroelectronics, Infineon, Rohm, and Bosch. STMicro is particularly well-positioned, supported by its aggressive localization strategy in China, including a joint venture with Sanan, as TrendForce points out.
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(Photo credit: Renesas)
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