Wolfspeed to file for bankruptcy in the USA
In May, Wolfspeed announced that it faced economic uncertainty, also coupled with the US-American political situation, whose changing trade policies put the industry under strain. However, the financial situation had likely started going sour far earlier, as the company had also announced that it was putting its planned semiconductor factory together with ZF on hold in Germany. The plant had initially been announced in early 2023, and was set to deliver semiconductors for customers such as Mercedes.
Now, Wolfspeed has worked out a restructuring agreement, which will see $275 million in fresh financing backed by some existing creditors and help reduce debt by $4.6 billion. It still needs to seek regulatory approval for the plan, but ambitiously has set its sights on emerging from the bankruptcy by the end of the third quarter of this year. According to Reuters, Wolfspeed “had about $1.33 billion in cash, and about $6.5 billion of debt obligations” in March.
“After evaluating potential options to strengthen our balance sheet and right-size our capital structure, we have decided to take this strategic step because we believe it will put Wolfspeed in the best position possible for the future,” said Robert Feurle, Wolfspeed’s Chief Executive Officer. “Wolfspeed has tremendous core strengths and great potential. We are a global leader in silicon carbide technology with an exceptional, purpose-built, fully automated 200mm manufacturing footprint, delivering cutting-edge products for our customers. A stronger financial foundation will enable us to focus acutely on innovation in rapidly scaling verticals undergoing electrification where quality, durability and efficiency matter most.”
In the meantime, the company will continue to operate and supply its products, and will “continue to pay vendors in the ordinary course of business for goods and services delivered throughout the restructuring process via an All-Trade Motion.”
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