News Article
Wolfspeed files for bankruptcy protection
SiC chipmaker files for Chapter 11 as next step in restructuring agreement
SiC chipmaker Wolfspeed has filed for Chapter 11 bankruptcy protection as it struggles with a combination of debt, slowing demand from EV and industrial markets, and increasing competition from Chinese semiconductor companies.
Wolspeed says this is the next logical step to implement its previously announced Restructuring Support Agreement (RSA) with key lenders, including: holders of more than 97 percent of its senior secured notes; Renesas Electronics’ wholly owned US subsidiary; and convertible debtholders holding more than 67 percent of the outstanding convertible notes.
As a result of this announcement two days ago, shares of the company rose 64.5 percent in extended trading, according to a report by news agency Reuters.
Once emerged from the process, Wolfspeed says it expects to have reduced its overall debt by approximately 70 percent, representing a reduction of approximately $4.6 billion and a reduction of its annual total cash interest payments by approximately 60 percent.
“We are continuing to move forward with our accelerated restructuring process to strengthen our capital structure and fuel our next phase of growth,” said Robert Feurle, Wolfspeed’s CEO. “With a stronger financial foundation, Wolfspeed will be better positioned to move faster on our strategic priorities and maintain our position as a global leader in the SiC market. The strong support of our lenders is a testament to their belief in our business and our ability to capitalize on the opportunities ahead, driven by our exceptional, purpose-built, fully automated 200mm manufacturing footprint.”
He continued, “Looking ahead, we remain laser-focused on delivering cutting-edge products to our customers and working with our vendors in the normal course. I’d also like to thank our employees for their hard work and continued commitment to driving the business forward. I am confident that taking this action will better position Wolfspeed to meet the growing demands of the semiconductor market.”
