Wolfspeed Inc., a Durham, North Carolina-based power semiconductor manufacturer, is preparing a prepackaged bankruptcy filing by July 1 after securing creditor approval to restructure its debt. The company will hand control to noteholders and major customer Renesas Electronics Corp. of Japan in exchange for significant debt relief.
Wolfspeed Inc., a leading supplier of silicon-carbide power semiconductors and headquartered in Durham, North Carolina, has reached a restructuring agreement with its creditors and key customer Renesas Electronics Corp. of Japan. The deal will reduce the company’s debt by approximately $4.6 billion—equating to a 70% reduction—and slash annual interest costs by an estimated 60%.
Under the restructuring plan, Wolfspeed will file for a prepackaged bankruptcy by July 1, with approval from 97% of its senior secured noteholders and 67% of its convertible noteholders. Renesas will convert its $2.1 billion deposit into convertible notes, common stock, and warrants. Additionally, existing holders will issue $275 million in new second-lien convertible bonds to support the restructured entity.
Shareholder impact includes a reduction in equity stakes to around 5% in the reorganized company. Despite a one-day stock drop of over 30%, Wolfspeed anticipates emerging from court protection by the end of the third quarter of 2025, pending court approval.
The move follows federal funding awarded under the U.S. Chips and Science Act, intended to expand production capacity. Although Wolfspeed received a portion of a $750 million award, it has been negotiating with the administration regarding the remaining balance. Shifting political priorities under a new administration have further complicated the timing and availability of these subsidies.
Wolfspeed previously retained advisers to explore options for resolving its heavy debt burden. By realigning its capital structure and returning to stable footing, the company aims to preserve its position in the strategic semiconductor market and resume its growth trajectory.
